Gasoline Prices

[Independent]

I've been spending $50 at a time to fill my gas tank. That's a "big" number to me. If I were buying a new car today, I'd want to think about the likely average price of gasoline over the next 5-10 years.

What's your estimate? (per gallon, for whatever grade you normally buy)

 

[FinanceDude]

I think the pirce of a gallon of gas should be 3% of the price of a barrle of oil.

For instance, when we hit $140 a barrel, gas was pretty much avergae of $4.20 a gallon. Now that oil is $100 a barrel, gas should be $3.00.

But that's my theory, no math behind it. It does NOT explain the jacking up of gas prices around Memorial Day or 4th of July............

 

[Zathras]

Short term demand, large scale demand and supply all affect the price.
In the last 10 years, the average has roughly doubled. I would roughly guess that will happen again over the next 10 years.
Of course, much of the oil we are finding now is more expensive to get out of the ground and/or refine.
Add to that increasing world demand as China and India buy more and more cars. Well, the doubling in 10 years may be vastly understated.
I plan on not using gasoline if at all possible. Sure, I will still face increased cost in any product that is transported via oil, food (oil based fertilizer), etc. But at least I can eliminate the volatility of gasoline prices.

 

[Leonidas]

But that's my theory, no math behind it. It does NOT explain the jacking up of gas prices around Memorial Day or 4th of July...........

Here's some help with the maths.

Crack Spread Calculations Demystified - Seeking Alpha

A Primer On Gasoline Prices

The summer changes? All gasoline is not refined the same, and a single gasoline formulation for the entire country year-round would not work well. The refiners have to change the volatility to make sure the gasoline will burn properly. They've always done that, but I think the govt got involved at some point with the natural result being that it has some glitches. Whatever the cause, at season changes (and more so in certain parts of the country) the refineries have to change the gasoline to a different formula and that means production is reduced temporarily.

 

[Pete]

I voted for the "I don't spend enough on gas to think about this", but really it was thinking about higher coming prices my whole life that set me up to not spend much on it. Originally my concern was evironmental, then it became logic and common sense that led me to bike, walk, take public transportation, and eventually retire early.
Things just seem to get better for me when gas prices rise. It's easier to park at the store, not many cars on the road locally making walking and biking nicer, no traffic on the freeways, the local air gets cleaner...and maybe this year it'll make its way into the CPI so I can get a nice raise. $5 a gallon...yeeehaaa

 

[MC1550]

$20 A Gallon by Christopher Steiner paints a picture on how our lives will change with higher gas prices in our future. It is not all bad news. Be prepared.

 

[RetiredGypsy]

The perfect opportunity for people to get rid of their cars and buy scooters and motorcycles and get those cool little diesels from Europe over here. 40-80+ MPG sure beats out 15-35.

I'd say it's going to go up between $4-5 for a total average for all States, but toward the end of the next ten year period. Here right now, it's already over $4, or was last time I checked. But it bounces between low $3 in the cooler months and jumps up to close to or slightly over $4 in the summer, and it's been doing that consistently for the last 4 or so years.

When prices jumped to over $2 a gallon, I was surprised people were still buying so many trucks and SUVs. Then at $4 a gallon here in about 2007, and people were still buying them up. Even now, it seems that rising gas prices aren't stopping many people for buying. Last report I read, sales of trucks and SUVs this year are up.

At $4/gallon a vehicle getting 18 MPG is paying about $0.22 a mile. That's about 4.5 miles to a dollar. If you bump that up to 20 MPG, it's $0.16/mile. 30 MPG at about $0.13, or a little over 7.6 miles to a dollar. Up to 40 MPG, it's $0.10, or a full 10 miles to a dollar. Unless you live really close to where you work or take the kids to school or wherever, or do your shopping, or rarely have to drive, that $0.10-20/mile difference can add up to hundreds or thousands of dollars a year extra in gas.

If the push for hydrogen and electric cars catches hold, it'll be interesting in a decade or to to see how much higher electricity costs are going to be (and how they're going to try to build the power plants required if Japan's nuclear accidents put nuclear power on the back burner again). I'd rather pay $4-5/gallon than rely on the level of technology batteries are at right now.

 

[Mulligan]

Higher gas prices kill us out state people, who have to drive to get anything. Not an anti-environmental guy, but maybe I watch too much Fox news (or is it Faux news for the non-believers). Until scientists can explain why they can go from this end
Another Ice Age? - TIME
to the extreme other end in just 30 years, I say lets start drilling for more oil!

 

[Zathras]

Yes, I get all my reliable science from Time and Fox

 

[Mulligan]

Yes, I get all my reliable science from Time and Fox

The Fox part I'll give you! But actually, Time wasn't the only one. Newsweek ran articles amongst others. I remember us studying the coming ice age in school, too. The ironic part, is some of the reasons they were suspecting that was causing the coming ice age are the same reasons being used as the reason for global warming. I'm no expert and I'm certain I definitely dont know what I'm talking about, but I do find that to be interesting none the less.

 

[Pete]

I don't want to turn this into a crazy environmental discussion, but I read we just passed a great milestone. There have been more than 20,000,000 man made chemicals released into the environment. Who knows what the heck that will do. There's just no "good" science on that...FOX or otherwise.

 

[F-One]

voted $5-6

The market has already trialed ~$4.50/gal a few years ago, as I recall it had some dampening effect on travel (use) but profit was very good. Based on that, I think that's about the upper limit today that would be tolerable to general public without huge hit on economy, add inflation in 5 -10 years and the concern of peak oil anytime and $5 -6/gallon would be "reasonable"

 

[brewer12345]

Personally, I will be just waiting for the next big gas price spike to buy a nice truck at a cheap price.

 

[Zathras]

The market has already trialed ~$4.50/gal a few years ago, as I recall it had some dampening effect on travel (use) but profit was very good. Based on that, I think that's about the upper limit today that would be tolerable to general public without huge hit on economy, add inflation in 5 -10 years and the concern of peak oil anytime and $5 -6/gallon would be "reasonable"

That seems to be the pattern at many price points.
First time we hit $3, as I recall, there was a pull-back in demand. But then we, as a society, seem to be less affected by it the second or third time we hit it. Until we just take it as a matter of course. The 'shock value' bar is reset to a higher price point.

Add to that, China and India's demand is growing larger. As that happens, a cut back in US demand will have less and less of a mitigating factor on prices.

Mulligan, I would love to discuss the topic you raise, but don't want to derail the thread.
If you truly do want an answer to your question, here is some information which should help:
http://www.realclimate.org/index.php/archives/2008/03/the-global-cooling-mole/

 

[REWahoo]

Personally, I will be just waiting for the next big gas price spike to buy a nice truck at a cheap price.

Having just purchased a new truck last week, I also thought the recent run-up in oil prices would have me in the cat-bird seat when it came to buying a [-]gas[/-] diesel-hog. I did get a decent deal (18% off sticker price) but it wasn't as good as I had expected.

Apparently the manufacturers are carefully structuring their production output to meet 2011 CAFE standards (currently under challenge in the courts), producing more high-mileage vehicles and fewer trucks. At least that's the impression I got after discovering the selection of new trucks I had to choose from on dealer lots was very limited - and this is TX! Many dealers only had a couple of diesel trucks in their inventory and I found only one within a 200 mile radius equipped the way I wanted it. I don't know if that is the case for gas powered trucks but I wouldn't be surprised to find fewer of those as well.

 

[MichaelB]

When gasoline costs $3, about 2/3 is the cost of crude, the rest is refining, distribution, taxes, profit. For gasoline to reach $5 the price of crude needs to double. When crude moves from $90 to $180, the world falls into recession. The price may hit $5, but looks unlikely to stay there.

If this does happen I imagine there will be lots of buying opportunities as a result. Trucks, cars, SUVs - even stocks.

 

[FinanceDude]

I am convinced if the USA started drilling in Alaska and drilling more In North Dakota, the price of a barrel would drop $20-$25 a barrel within a week...........

 

[Independent]

Higher gas prices kill us out state people, who have to drive to get anything. ... I say lets start drilling for more oil!

I live in Iowa so I also drive everywhere. But I'm not expecting US drilling to make a big difference. Just looking at Wikipedia this morning, it appears the world uses 32 billion barrels of oil per year, while the US has 21 billion barrels of proven reserve. There's a lot more oil that's not "proven reserve", but it gets increasingly expensive to extract (most is under the outer continental shelf). The best guess is 134 billion barrels if we could get it all.

Trying to estimate future prices, I'd assume some additional drilling, but it's a result of price increases, not something that will prevent price increases.

 

[Westernskies]

Yes, I get all my reliable science from Time and Fox

Excellent! Rachel Maddow is my go-to girl.

 

[ericm]

I work in bio remediation....you cannot believe the crap that is in our soil and groundwater.

A slow move from fossil fuels, and all the garbage we add to them in the refinement and productizing, is a must.

Solar panels on your roof + elec car and moto = solution and the future

I'm tired of foreign wars and protecting "interests", which a majority of, are tied to the oil lobby.

 

[martyp]

I am convinced if the USA started drilling in Alaska and drilling more In North Dakota, the price of a barrel would drop $20-$25 a barrel within a week...........

Additional drilling in the US would add to the world oil supply and would effect the world oil price by whatever fraction US oil is to the world capacity. I think some people believe that drilling US oil somehow would specifically decrease US prices. US oil goes on the world market. US prices won't drop any differently than world prices unless someone wants to nationalize the US oil companies and require that US oil stay in the US at a Govt set price.

 

[martyp]

I purchased my Prius during the last gas price spike and have been very happy with it. I'm getting about 45 mpg which is the same as my motorcycle and significantly better than our other car, a Subaru WRX. Fortunately, now that I am ER'd I am putting fewer miles on the car.

I used to work at a DOE lab whose research was focused on cellulosic biofuels so I've paid attention to this issue over the years. I think the solution in then end is going to be a multitude of energy sources for a variety of purposes: oil, coal, gas, nuclear, wind, solar, hydroelectric, biofuels, conservation, and energy efficiency. I see this maybe 10-20 yrs down the road. I expect that it will be a very bumpy road.

 

[BigNick]

The perfect opportunity for people to get rid of their cars and buy scooters and motorcycles and get those cool little diesels from Europe over here. 40-80+ MPG sure beats out 15-35.

I thought my Hyundai diesel (2.0) small SUV, which gets 40 mpg US, was economical, until last weekend when Hertz rented me a BMW 320d in Ireland. I got 53mpg US out of it, driving around country lanes.

 

[Leonidas]

I thought my Hyundai diesel (2.0) small SUV, which gets 40 mpg US, was economical, until last weekend when Hertz rented me a BMW 320d in Ireland. I got 53mpg US out of it, driving around country lanes.

What is price for diesel compared to gasoline over there?

 

[samclem]

I don't want to turn this into a crazy environmental discussion, but I read we just passed a great milestone. There have been more than 20,000,000 man made chemicals released into the environment. Who knows what the heck that will do. There's just no "good" science on that...FOX or otherwise.

C'mon. Nobody knows how many chemicals have been introduced (or exist already) in the environment. And this 20 million figure that no one ever heard of and which was pulled out of nowhere is a "milestone?"

I did read that oxygen dihydride, produced both naturally and synthetically, is known to be present in all cancer cells. More to follow. . .