What is with the sudden 8-12 cent per gallon hike in fuel prices at the pump? Just as they were creeping downward to 1.29/gallon they shot to 1.41/gallon locally. I have not witnessed any news coverage regarding this, but the consumer public is so screwed over by corporations and governments we are in a constant stupor and news like this just rolls off our backs. It WAS the best of times, it IS the worst of times.
After paying petrol/gas prices in the UK for most of my adult life; on my first visit to the USA I became convinced that when Americans talk of the 'Land of the Free' they had gas prices in mind. "God Bless America - the land of the free gas " Roy Maybery
$1.41 per gallon isn't all that bad. If you live in Europe you would know that this is a bargain. The average price of gasoline in Europe is $11 - 15 dollars (U.S.) a gallon. We don't have any reason to complain (at least not for now).
My complaint is not the price but how that price leaps up (+10 to 12 cents) and creeps down (-2 to -3 cents). Usually something on the global front will trigger a price movement in oil - so what happened recently to do that? The middle east is always in turmoil (the last 3 letters are interesting).
I forget just how it works but oil pricing becomes complicated. As I recall, the oil being bid on in the marketplace is not the oil in the ground but the oil asea and on its way to refineries. That oil can remain enroute for months. Without appropriate bidders, tankers can remain outside of harbors awaiting buyers. As with other extraction industries, the profit/loss cycle of the oil companies can be in terms of years and actual profit/loss can be quite independent of current oil prices.
Oil prices, as well as Wall Street in general, are effected by many external factors that dictate whether prices rise or fall. It would seem that with an economy that is struggling along that some intervention would be necessary to soften any increase in energy costs so as not to hinder any recovery that may be in the works. The FED has played with interest rates for the last decade adjusting up or down based on economic indicators why not regulate energy costs/taxes as well. As fuel costs rise so does food, travel, home/business heating, etc. which means less disposable income for most households which means less purchasing power which means more layoffs ............
You said that the consuming public gets screwed by corporations and governments. Not that those of either category wouldn't apply to us the threaded nail but neither has seemed much capable of controlling the price of oil. The commodities market is not quite the stock market. The Fed has played with interest rates since 1913. To what effect has been the subject of much debate. Why not regulate energy costs? Because command economies are disasters and the province of the worst of tyrants. Why not regulate taxes? Because taxes are the means by which votes are bought and the votes bought create the demand for more taxes.
But there doesn't seem to be a lack of supply at the moment. Unless demand has peaked (summer vacations?) I haven't heard why prices have shot up recently. Maybe its the Iraqi oil hitting the market - let Iraqi oil profits pay for reconstruction. It would be nice if the present government had a rapport with its constituency.
Demand due to vacation travel is often cited. Less often mentioned is that gasoline prices are more immediately affected by the supply of refined product than the availability of crude. The U.S. has built few new refineries due to environmental hurdles and the NIMBY thing.
If pump price is based upon refined quantity then I am certain producers "tinker" with production output to manipulate pump prices. They have this down to a science I would venture a guess and,with a favorable administration who looks the other way,do it freely. Oh well, its time to bend over and take our medicine like a good, quiet consumer.
Without the banks and the oil companies we Americans would be deprived of half of our conspiracies and more than a few political plarforms. BOHICA? Maybe, but we consumers do have consumption options.
Refinery problems in TX and CA, strike(s) (threatened strikes, more precisely), and Claudette disrupting operations in the Gulf. Anyway, these retailers seem to jump the gun, raising prices at the pump well before any actual increase in their cost (doesn't seem to hold true when crude is falling, though).
I've seen explanation for that but wasn't convinced by it and have forgotten it. That the retail price would be slow to fall makes sense in that the retailer, and others along the supply chain, must make good the cost of gas on hand. The quick rise in price is another story.
In CA, gas has actually gone down a few times in the last couple of weeks. I've seen it as low as $1.51 this week. Where I live, I filled up before I left to work on Monday and Regular was @ $1.69.
In the Knoxville, TN area it was 1.34/gal last Saturday before leaping up. The Atlanta area is normally a cheaper area for gas prices. Why ? Maybe less state and local taxes.
I thought everybody knew - it's part of the vast right-wing conspiracy to subvert the inevitable historical dialectic.
