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(International Business Times)   Think all that new oil the U.S. is producing will bring down gasoline prices at the pump? Don't worry, the refiners have a plan to prevent that   (ibtimes.com) divider line 52
    More: Sad, U.S., gas prices, U.S. Energy Information Administration, American Automobile Association  
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2611 clicks; posted to Business » on 22 Apr 2014 at 12:23 PM (34 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



52 Comments   (+0 »)
   
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2014-04-22 10:24:59 AM  
$4 locally for mid-grade
 
2014-04-22 10:40:56 AM  
But seriously you guys we just need to build some more pipelines and repeal Obamacare and boom we'll be at like $.30/gal gas forever.
 
2014-04-22 10:43:43 AM  
See?  We don't need Keystone XL.  The oil companies will figure out how to export our oil out of the country regardless.
 
2014-04-22 11:17:40 AM  
No, I didn't think that.  Anyone who did doesn't understand anything about petroleum production.
 
2014-04-22 11:21:48 AM  
I blow a gasket every time I hear big oil pundits use possessive pronouns like "our oil" and "we need to drill more". Since when did we nationalize domestic oil production? These companies are going to sell to the highest bidder, not sell cheap to US citizens out of a sense of patriotism.
 
2014-04-22 11:25:39 AM  

PreMortem: I blow a gasket every time I hear big oil pundits use possessive pronouns like "our oil" and "we need to drill more". Since when did we nationalize domestic oil production? These companies are going to sell to the highest bidder, not sell cheap to US citizens out of a sense of patriotism.


I believe the USA is the only country in the world that has not nationalized their energy assets.  But I have been wrong before.
 
2014-04-22 11:49:35 AM  
Is the sad tag standing in because the obvious tag drives a big SUV?
 
2014-04-22 11:53:17 AM  
Nope, never thought that.

We're too busy making money off of all that oil, not to mention coal and natural gas.

Strategically, I am not sure it is the best move long term, to sell all our energy sources off to the highest bidder.

//I was looking for a comic, that had the US with some caricature like coal mines, oil pipelines and wells, and natural gas wells all feeding some tanker ships leaving US ports, but could not find it.
 
2014-04-22 12:01:33 PM  
I know oil is a commodity. And the price is set by global demand. But can someone explain to me how the price of shipping the oil figures into its cost? It seems logical that you would want to refine and consume the oil and its products as close to the source as possible to keep your costs down and that imported oil should always cost more than domestic oil because it costs money to move that oil around.
 
2014-04-22 12:20:01 PM  

IgG4: I know oil is a commodity. And the price is set by global demand. But can someone explain to me how the price of shipping the oil figures into its cost? It seems logical that you would want to refine and consume the oil and its products as close to the source as possible to keep your costs down and that imported oil should always cost more than domestic oil because it costs money to move that oil around.


The problem is the taxes.  The poor poor oil companies have to pay federal taxes on the oil consumed in the US.  As long as transport costs are lower than the taxes paid, the oil companies will want to export "their" oil out of "our" country.
 
2014-04-22 12:29:19 PM  
So, did I miss something or did nothing in the "article" (I prefer 'crappy blurb') talk about what refiners are are doing to keep prices up?
 
2014-04-22 12:35:31 PM  
...so here's a pic from 3 years ago.
s1.ibtimes.com

but yeah, mine's up .50/gal in the past 6 weeks
 
2014-04-22 12:35:52 PM  

PapaChester: So, did I miss something or did nothing in the "article" (I prefer 'crappy blurb') talk about what refiners are are doing to keep prices up?


They are exporting more and more refined gasoline creating an artificial shortage domestically.
 
2014-04-22 12:37:21 PM  
I'm assuming gas prices are staying up because local producers and refiners find it more profitable after expenses to ship overseas rather than here, thus raising the prices until they're competitive with the world market.

/not that the article really hit *that* nail on the head.
//Did beat around it considerably though.
 
2014-04-22 12:43:35 PM  
Marathon oil (the refining monopoly of the Midwest) always finds a way to pound us in the backside with 30 cent price spikes

Marathon = Muguthon
 
2014-04-22 12:45:24 PM  
$3.60 in Annapolis MD
 
2014-04-22 12:46:10 PM  

Marcus Aurelius: IgG4: I know oil is a commodity. And the price is set by global demand. But can someone explain to me how the price of shipping the oil figures into its cost? It seems logical that you would want to refine and consume the oil and its products as close to the source as possible to keep your costs down and that imported oil should always cost more than domestic oil because it costs money to move that oil around.

The problem is the taxes.  The poor poor oil companies have to pay federal taxes on the oil consumed in the US.  As long as transport costs are lower than the taxes paid, the oil companies will want to export "their" oil out of "our" country.



This.  Everyone knows companies don't pay local fuel taxes on overseas sales.  That imported fuel is tax-free, yessiree!upload.wikimedia.org
 
2014-04-22 12:51:08 PM  
elvisaintdead:

but yeah, mine's up .50/gal in the past 6 weeks

That is the typical "summers coming" price gouge we get every year.
 
kab
2014-04-22 12:54:33 PM  
How's that 'drill baby drill' thing working out for you?
 
2014-04-22 12:58:48 PM  

elvisaintdead: ...so here's a pic from 3 years ago.


but yeah, mine's up .50/gal in the past 6 weeks


Yep. I'm in SoCal and its very high here, $4.60 and up. Brutal.
 
2014-04-22 01:00:28 PM  

StrikitRich: PapaChester: So, did I miss something or did nothing in the "article" (I prefer 'crappy blurb') talk about what refiners are are doing to keep prices up?

They are exporting more and more refined gasoline creating an artificial shortage domestically.


But that is not how they are keeping prices up. That is what they originally intended to do with it when the US government allowed them to export it. "Selling stuff" is not equivalent too "creating a plan to artificially inflate prices."
 
2014-04-22 01:03:44 PM  
Do you want to solve this problem?  Ban the export of fuels on grounds of national security for 15 years.  We're going to need the fuel anyway for when the rest of the world decides we haven't had a good war in a while.
 
2014-04-22 01:18:59 PM  
Gasoline price is rising again?  Hmmm, I hadn't really noticed...
media.caranddriver.com
 
2014-04-22 01:19:45 PM  

pat34us: elvisaintdead:

but yeah, mine's up .50/gal in the past 6 weeks

That is the typical "summers coming" price gouge we get every year.


"we are switching to the summer blend"  should be coming in the next week
 
2014-04-22 01:22:37 PM  

Marcus Aurelius: IgG4: I know oil is a commodity. And the price is set by global demand. But can someone explain to me how the price of shipping the oil figures into its cost? It seems logical that you would want to refine and consume the oil and its products as close to the source as possible to keep your costs down and that imported oil should always cost more than domestic oil because it costs money to move that oil around.

The problem is the taxes.  The poor poor oil companies have to pay federal taxes on the oil consumed in the US.  As long as transport costs are lower than the taxes paid, the oil companies will want to export "their" oil out of "our" country.


It's not just that though, if the article is to be believed it creates a scarcity here which solves another gas company problem, which is prices here are too low. So they sell to where prices are higher and in return drive up prices here.
 
2014-04-22 01:22:55 PM  

StrikitRich: PapaChester: So, did I miss something or did nothing in the "article" (I prefer 'crappy blurb') talk about what refiners are are doing to keep prices up?

They are exporting more and more refined gasoline creating an artificial shortage domestically.


Isn't that what started the gas shortages in the 70s? Only instead of calling them "Big Oil" back then, we called them OPEC?
 
2014-04-22 01:23:38 PM  
This ain't rocket surgery. Global demand is increasing, duh. The Chinese and the Indians want to drive cars too. You want cheaper gas here, build more refineries.
 
2014-04-22 01:24:55 PM  

Dr Dreidel: StrikitRich: PapaChester: So, did I miss something or did nothing in the "article" (I prefer 'crappy blurb') talk about what refiners are are doing to keep prices up?

They are exporting more and more refined gasoline creating an artificial shortage domestically.

Isn't that what started the gas shortages in the 70s? Only instead of calling them "Big Oil" back then, we called them OPEC?


And by "that", obviously, I mean "artificially manipulating supply".
 
2014-04-22 01:26:32 PM  
Anyone who thinks that is stupid.
 
2014-04-22 01:39:48 PM  

Hyjamon: pat34us: elvisaintdead:

but yeah, mine's up .50/gal in the past 6 weeks

That is the typical "summers coming" price gouge we get every year.

"we are switching to the summer blend"  should be coming in the next week


Good point, and don't forget the "$5 gas is on the way" that every "news" station will be reporting so we will not complain to much about paying $4.30+/gal

It's become an annual ritual at this point.
 
2014-04-22 01:43:21 PM  

GoldDude: Gasoline price is rising again?  Hmmm, I hadn't really noticed...
[media.caranddriver.com image 850x519]


You will once your state or Congress passes a "Use Tax" for electric vehicles.

/the revenue from that tax will be used to fund oil company subsidies
 
2014-04-22 01:57:34 PM  

King Something: GoldDude: Gasoline price is rising again?  Hmmm, I hadn't really noticed...
[media.caranddriver.com image 850x519]

You will once your state or Congress passes a "Use Tax" for electric vehicles.

/the revenue from that tax will be used to fund oil company subsidies


If you live in God's Own Commonwealth, you're already paying twice as much to register your hybrid or EV.

// signed into law by Bob "NO TAXES (also no ethics)" McDonnell
 
2014-04-22 02:15:38 PM  

GoldDude: Gasoline price is rising again?  Hmmm, I hadn't really noticed...
[media.caranddriver.com image 850x519]


II was going to point out the thread follows a Tesla thread...
 
2014-04-22 02:26:18 PM  
$3.33/gal in Tulsa
 
2014-04-22 02:26:43 PM  

PreMortem: I blow a gasket every time I hear big oil pundits use possessive pronouns like "our oil" and "we need to drill more". Since when did we nationalize domestic oil production? These companies are going to sell to the highest bidder, not sell cheap to US citizens out of a sense of patriotism.


WELL
THe oil is on federal land.
it is OUR OIL.
we sold the rights WAY TOO LOW

one simple fix is to apply an export fee to all fuels
10, 20, 30% and prices would come down locally
or they would shut down refineries until they get the fees removed
LOL
 
2014-04-22 02:27:21 PM  

kab: How's that 'drill baby drill' thing working out for you?


Pretty good.

2.bp.blogspot.com
 
2014-04-22 02:28:13 PM  

RoLleRKoaSTeR: Marathon oil (the refining monopoly of the Midwest) always finds a way to pound us in the backside with 30 cent price spikes

Marathon = Muguthon


monopolies = we are farked.
without competition and new refineries, prices will always suck ballz
 
2014-04-22 02:29:12 PM  

HeadLever: kab: How's that 'drill baby drill' thing working out for you?

Pretty good.

[2.bp.blogspot.com image 850x620]


imagine a world where the US has zero trade deficit?
that would be ODD
 
2014-04-22 02:30:10 PM  

namatad: WELL
THe oil is on federal land.
it is OUR OIL.
we sold the rights WAY TOO LOW


No, the on-shore oil being produced in the Bakken is mostly from private/state lands.
 
2014-04-22 02:39:20 PM  
Once we get that Keystone pipeline put in, gas is going to be super-cheap.  You'll see.
 
2014-04-22 02:42:13 PM  

IgG4: I know oil is a commodity. And the price is set by global demand. But can someone explain to me how the price of shipping the oil figures into its cost? It seems logical that you would want to refine and consume the oil and its products as close to the source as possible to keep your costs down and that imported oil should always cost more than domestic oil because it costs money to move that oil around.


That is logical.  Except that moving excess oil or gas from one point in the US to another is very expensive at the margin.  For normal flows it's cheap because of pipelines except when environment-hating idiots delay or prevent needed pipelines.  For supra-normal flows or flows which run ahead of pipeline construction the oil has to travel by rail or truck, which is insanely expensive.  Why not by tanker?  Because under the Jones Act anything being shipped from one US port to another has to go on a US-built, US-flagged, US-crewed vessel  There are only 11 of them that can travel on the ocean (things are better on rivers).  So it costs three times as much money to ship oil from Houston to Philadelphia or New Jersey than it does to ship it to Canada or South American countries.

The result is that oil gets exported from Mexico to New Jersey and refined into gasoline while Houston exports gasoline.
 
2014-04-22 03:02:55 PM  

Rapmaster2000: Once we get that Keystone pipeline put in, gas is going to be super-cheap.  You'll see.


May bring the price down but my guess is not in this country. They are already building the shipping platforms to take it away.
 
2014-04-22 04:09:57 PM  

Marcus Aurelius: See?  We don't need Keystone XL.  The oil companies will figure out how to export our oil out of the country regardless.


This article doesn't name it, but the "new pipeline relieving a stockpile of oil previously stuck in the middle of the country" is Keystone XL. At least the southern leg of it, which went into service a few months ago as governments continued to debate the northern half.
 
2014-04-22 04:34:41 PM  

Galloping Galoshes: Marcus Aurelius: IgG4: I know oil is a commodity. And the price is set by global demand. But can someone explain to me how the price of shipping the oil figures into its cost? It seems logical that you would want to refine and consume the oil and its products as close to the source as possible to keep your costs down and that imported oil should always cost more than domestic oil because it costs money to move that oil around.

The problem is the taxes.  The poor poor oil companies have to pay federal taxes on the oil consumed in the US.  As long as transport costs are lower than the taxes paid, the oil companies will want to export "their" oil out of "our" country.


This.  Everyone knows companies don't pay local fuel taxes on overseas sales.  That imported fuel is tax-free, yessiree![upload.wikimedia.org image 850x874]


Correct me if I am wrong, but that graph is the taxes consumers pay at the pump, not the tax rate companies pay to operate in a country.
 
2014-04-22 04:41:24 PM  
Wow.. it's almost like these giant multi-national energy companies just don't give a flying fark about lowering energy prices in the United States!  Why didn't anyone warn us?!  Oh well.  Surely once Keystone XL is complete, gas stations will be paying ME to fill up my tank!  Checkmate libridiots!
 
2014-04-22 04:45:58 PM  

GoldDude: Gasoline price is rising again?  Hmmm, I hadn't really noticed...
[media.caranddriver.com image 850x519]

Yup, I remember what a hassle it was having a car that didn't have a full tank every time you left from home and work. Pumping gasoline is so 20th century.
media.caranddriver.com
 
2014-04-22 06:13:51 PM  
No matter what the world energy markets do, gas prices are not going to dip below $3/gal ever again. Why, you ask? Because the oil companies have figured out that somewhere between $3-$4 is a price people will pay  without complaining too terribly much, at least not enough to make radical changes to their consumption.

Just wait until they get the LNG terminals they're all clamoring to build. Then you can expect your natural gas bill (used by a good portion of the country for winter heating) to triple too. Selling our energy interests globally helps nobody except the executives that pocket the bonuses.
 
2014-04-22 07:22:51 PM  

buzzcut73: No matter what the world energy markets do, gas prices are not going to dip below $3/gal ever again. Why, you ask? Because the oil companies have figured out that somewhere between $3-$4 is a price people will pay  without complaining too terribly much, at least not enough to make radical changes to their consumption.



There was a day when OPEC didn't want oil over $20 per barrel because it would increase people's desire for efficiency. Then it was $30. Then $50. Then $100. Now fark it.

But either way, fungible resources get sold and exported globally. If it's more advantageous to transport it and sell it somewhere else then that's exactly what is going to happen.
 
2014-04-22 07:42:31 PM  
...$.50 in the last month or so here, and for no real reason.

/Would rather they just took numbers down off the gorram signs and put up BECAUSE FARK YOU THAT'S WHY
 
2014-04-22 08:44:19 PM  
Build things closer together, increase pedestrian access, improve public transit and live locally. I know, know, not very American
 
hej [TotalFark]
2014-04-23 08:37:42 AM  
Fine with me.  The more expensive it is, the faster the civilized world actually tries to replace it.
 
2014-04-23 01:24:11 PM  

AtlanticCoast63: ...$.50 in the last month or so here, and for no real reason.



We already posted the reasons, it is the annual "summers here" gouge, up next is the "summer blend" gouge to be followed by the "be happy, $5/gal is on the way" media defense.
 
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