Average gas price $6.20/gal by end of Summer

[Car-Guy]

There are hundreds of oil producers, here and in other countries that provide crude oil and refined products to the U.S. How can you say it
it's greed? It's always a supply and demand issue.

It sure wasn't greed ~two years ago when XOM, CVX, etc couldn't hardly give their oil away and their stock prices were in the toilet.

 

[aja8888]

In addition, oil prices are set globally, unfortunately folk like to put the blame on something, some company, someone or some party when it really has not much to do with any of those. It is at minimum a combination, but even that is a long shot, it is set by traders and their emotions. So if anything we could probably blame the stock markets, there the greed argument may apply.

Exactly. I spent 30 years of my career in oil & gas. Biden's rant about Exxon/Mobil was just grandstanding.

There are roughly 150 different crude oil prices quoted daily. WTI and Brent are the most common though.

see https://oilprice.com/

 

[Ian S]

There are hundreds of oil producers, here and in other countries that provide crude oil and refined products to the U.S. How can you say it
it's greed? It's always a supply and demand issue.

It may be a supply and demand issue but it's not a free market. OPEC+ reduced production in 2020 to avoid a collapse in the oil market due to COVID. Last year, the cartel agreed to gradually increase production as the world economy improved but by most estimates the rate of production is too low. Today, daily production by OPEC+ is still 2.5 million barrels short of the level before COVID. A shortfall like that, because of oil and gasoline inelasticity, will cause a significant increase in prices and that's what we are seeing. The Russians are happy to see the high prices and the Saudis are refusing to help because of politics. See here for more https://www.bbc.com/news/business-61188579

 

[MC Rider]

Paid $6.59 today for regular. OK, Lake Isabella, gas has to be trucked in a pretty good distance. But, ouch.

 

[Mr. Tightwad]

I drive electric and haven't paid for gasoline in 4 years, but I did notice today that the two stations nearest me are both at 5.99 for regular. This is contrary to the media headlines, that would have everyone believing its $8 and $10 here in CA.

 

[Car-Guy]

^^^^ 5.99 doesn't make good headlines these days.

 

[aja8888]

Still $4.49 for 87 octane around here today.

 

[MC Rider]

^^^^ 5.99 doesn't make good headlines these days.

Yep. If it bleeds, it leads. Find the highest price you can.

In this case your wallet is doing the bleeding.

 

[justlikebike]

Sigh,
As a Canadian, I wish to make you all feel better by stating in my city the current price is $2.31 CDN per liter. Approx: $9.24CDN Per gallon. So you should be able to feel my tears.
DW and I went shopping for an electric car the other day. There is a 2 year waiting list.
It feels a bit unreal out there these days.

 

[aja8888]

Sigh,
As a Canadian, I wish to make you all feel better by stating in my city the current price is $2.31 CDN per liter. Approx: $9.24CDN So you should be able to feel my tears.
DW and I went shopping for an electric car the other day. There is a 2 year waiting list.
It feels a bit unreal out there these days.

Yes, we feel your pain too. You are paying $7.22 U.S. for that fuel which is close to where some places in the states are now.

 

[MC Rider]

Sigh,
As a Canadian, I wish to make you all feel better by stating in my city the current price is $2.31 CDN per liter. Approx: $9.24CDN So you should be able to feel my tears.
DW and I went shopping for an electric car the other day. There is a 2 year waiting list.
It feels a bit unreal out there these days.

So, about $7.20 per gallon US$. 2 years wait list?


Tears like rain.

 

[Turbo29]

Has anyone seen or heard of a gas station that was out of gas due to lack of supply? Me neither. There is no lack of supply, just greedy mega corps.

I am amazed at all of the rants about "greed" and "profits" given that the ER crowd invests in stocks of these "greedy" corporations and their investments go up because of their "profits," which allows them to retire early.

 

[aja8888]

I am amazed at all of the rants about "greed" and "profits" given that the ER crowd invests in stocks of these "greedy" corporations and their investments go up because of their "profits," which allows them to retire early.

The bitching usually starts when the market goes down.

 

[aaronc879]

I am amazed at all of the rants about "greed" and "profits" given that the ER crowd invests in stocks of these "greedy" corporations and their investments go up because of their "profits," which allows them to retire early.

Some people care about more than just themselves. I would hate to get uber rich while the working poor suffer as a result.

 

[Turbo29]

Some people care about more than just themselves. I would hate to get uber rich while the working poor suffer as a result.

And some like to virtue signal at the same time they are looking at how much their accounts have gone up.

 

[Exchme]

Inflation adjusted, we are not at the peak historical price (2007) or biggest % increase (1973). Those ended great, so we'll be fine.

Wait, what? Those were followed by bitter recessions? Uh-oh.

As for the talk of profiteering, folks have got to be kidding. Energy companies have been going through long term contraction for most of the last 40 years (in 1980, energy was 30% of the S&P, it's 5% now) and there has been nothing but layoffs for about a decade. Those factors will make supply responses slower than usual and it's always slow.

It takes a year or more for oil profits to be high enough for executives to repair balance sheets and to believe they really will make money in the long term this time (usually, like Lucy pulling the ball away, the big projects all get done at the same time, prices crash, executives lose their jobs and supply overhang lasts for several years until we do the whole thing again).

Once interested, it will take several more years to lease, explore, design, permit and build significant new capacity. The experienced workforce is small these days as the old timers are gone, no one has hired in years and young people aren't even considering fossil fuels as a career, so projects will take even longer than normal.

You might be tempted to guess that Russia didn't randomly pick this moment to invade Ukraine, they found a time when the world was quite vulnerable and really needed their product. OPEC has no surplus, shale seems to be peaking, the industry hasn't recovered from a long spell of low prices, significant EV penetration or renewable fuel production is still in the future.

 

[GravitySucks]

OTOH owning XOM has worked out for me. Not trying to be snide, it's just the "problem/opportunity" angle. As they say. "Life isn't fair. It's your job to go where it isn't fair in your favor ".



Of course, mom's house uses 1200 gallons of heating oil a year so there's that.

Yup.
Volitile stocks on a big upswing.

The real cost increase is taking so many sources off line IMHO.

 

[NW-Bound]

Has anyone seen or heard of a gas station that was out of gas due to lack of supply? Me neither. There is no lack of supply, just greedy mega corps.

If gas were priced at $2/gallon instead of $5-6, people would drive more, and suddenly we would have lack of supply.

The price has to be high, in order to tamp down demand to match the supply.

So, why is supply not increasing? What I keep reading is that oil companies were burned in the past when they overproduced. And they were called names for adding to the climate change, so they don't wanna do what they did in the past and pump more.

 

[Teacher Terry]

It’s 6/gallon in Reno.

 

[kingkarmann]

I can say firsthand it's affecting us and my MIL who has Alzheimer's dementia.
She lives with DW & I.
We have caregivers for her from 8a-5p Mon-Fri. so we can work and take care of chores.
We have lost a couple of really good in home health aids. They were looking for opportunities closer to home.
Gas is too much for them.
Gas prices are contributing to some unforeseen circumstances.

 

[kingkarmann]

I can say firsthand it's affecting us and my MIL who has Alzheimer's dementia.
She lives with DW & I.
We have caregivers for her from 8a-5p Mon-Fri. so we can work and take care of chores.
We have lost a couple of really good in home health aids. They were looking for opportunities closer to home.
Gas is too much for them.
Gas prices are contributing to some unforeseen circumstances.

 

[Car-Guy]

If gas were priced at $2/gallon instead of $5-6, people would drive more, and suddenly we would have lack of supply.

The price has to be high, in order to tamp down demand to match the supply.

+1, I suspect that's true for many (not all) and will continue as prices increase. (Except for big rigs)

 

[REWahoo]

So, why is supply not increasing? What I keep reading is that oil companies were burned in the past when they overproduced. And they were called names for adding to the climate change, so they don't wanna do what they did in the past and pump more.

I think Exchme summed it up nicely:

...Energy companies have been going through long term contraction for most of the last 40 years (in 1980, energy was 30% of the S&P, it's 5% now) and there has been nothing but layoffs for about a decade. Those factors will make supply responses slower than usual and it's always slow.

It takes a year or more for oil profits to be high enough for executives to repair balance sheets and to believe they really will make money in the long term this time (usually, like Lucy pulling the ball away, the big projects all get done at the same time, prices crash, executives lose their jobs and supply overhang lasts for several years until we do the whole thing again).

Once interested, it will take several more years to lease, explore, design, permit and build significant new capacity. The experienced workforce is small these days as the old timers are gone, no one has hired in years and young people aren't even considering fossil fuels as a career, so projects will take even longer than normal...

 

[jkern]

It's around $6.50 to $7.00 here in the SF Bay Area with several stations more than $7. Surprisingly, the roads are still packed.

 

[Car-Guy]

It's around $6.50 to $7.00 here in the SF Bay Area with several stations more than $7. Surprisingly, the roads are still packed.

Let's see, SF Bay area... Maybe the roads are packed with EV's?