What is the official reason for rising gas prices?

[savalez]

Searching around I'm getting a lot of theories.

Thanks.

[Angry Dragon]

1. Official or real??

[RevStPatrick]

3. That's exactly what I was going to say.

Of course, there's also the Tea Bagger reason, which is that we need to drill, baby, drill!

[orwell]

6. US rig counts are at an all time high.

US oil production is higher than it was in the last four years of the Bush Administration.

I believe there are more rigs in and around the US than the rest of the world combined. But you would never know that if all you listen to is Faux News.

We are already drilling baby...

[savalez]

7. Official n/t

[Angry Dragon]

12. Varies

Republican: Obama is raising the price of oil
Teabaggers: Too many regulations(could be added to republican also)
Democrats: Greed and speculation
Real: Speculation

[RKP5637]

15. Exactly as you said, "Real: Speculation." I don't have a link, but I heard someplace this

week that diesel fuel is being exported from the US to other countries for higher prices thereby creating a shortage here (real or not?) and causing prices to rise.

[Spider Jerusalem]

22. That's nonsensical

diesel fuel and gasoline aren't being exported to "create a shortage"; there is no shortage, what there is is reduced demand in the US. If there were in fact a shortage then it would wreak havoc with the supply and distribution of most things including food because pretty much everything sold in the US is shipped by truck. US demand is down by about 2 million barrels a day from peak; at the same time global demand is near all time high levels, mostly thanks to China.

[RKP5637]

26. Here's the article. Yes, I definitly agree, there is not a shortage. ... Here's the article ...

http://www.usatoday.com/money/industries/energy/story/2011-12-31/united-states-export/52298812/1

"There's at least one domestic downside to America's growing role as a fuel exporter. Experts say the trend helps explain why U.S. motorists are paying more for gasoline. The more fuel that's sent overseas, the less of a supply cushion there is at home.

Gasoline supplies are being exported to the highest bidder, says Tom Kloza, chief oil analyst at Oil Price Information Service. "It's a world market," he says.

Refining companies won't say how much they make by selling fuel overseas. But analysts say those sales are likely generating higher profits per gallon than they would have generated in the U.S. Otherwise, they wouldn't occur."

[onehandle]

2. Iran.

The 'secret war' going on between Israel and Iran, threats to oil shipping by Iran, their nuclear activities, etc.

[Blue Owl]

4. Pure and simple CEO-level greed would be my answer

n/t

[orwell]

5. Futures market speculation related to the situation in the Middle East...

...regarding potential War with Iran and the supply disruptions that would occur if the Straight of Hormuz is blocked.

Add to that the problems in Syria and it's understandable that the futures market would bid up the price of oil.

It certainly is not an immediate supply/demand situation as general demand is weak and supply is relatively strong.

[xxqqqzme]

11. Was having this discussion last night

at a local Dem meeting. I think the futures market speculation is getting out to the public.

[WCGreen]

25. when oil was 147 bucks a barrel, gas was about 2.50 a gallon...

Oil is now 105 bucks a barrel and gas is closing in on 4.00 a gallon.

I think it is price rigging on the part of the oil companies to make Obama look bad...

[orwell]

28. When crude hit 140+ on the futures...

average gas prices were in the $4.10 range. They are now in the $3.60 range

[WCGreen]

29. That is now, not back in 2007, I think....

[Spider Jerusalem]

31. Oil is not $105 a barrel

Brent crude is at $124 a barrel on the ICE in London; Brent is the actual benchmark for world oil prices. The price quoted in the US financial news is not the price of oil on world markets or even for most of the oil produced in the US.

[WCGreen]

32. that still 20 bucks lower than it was back in te mid 2000's when gas was going for 2.50 a gallon...

[Spider Jerusalem]

33. Not true

Record oil price, 7 July 2008, $147 a barrel. Average pump price for one gallon of unleaded, July 2008: $4.11. http://news.consumerreports.org/cars/2008/07/gas-prices.html

[WCGreen]

34. I stand corrected.

I was looking at the wrong chart. I need to now when to take the time to actually enlarge things. I ain't getting any younger...

[pinto]

8. I never quite "get" how they establish gas prices...

Demand / usage is trending down here (US) so it doesn't seem tied to consumtion consumption.

What it means for me (I don't drive anymore) as well as everyone else is that rising gas prices also means rising prices for any thing that gets trucked. I try and buy as many made-local products as possible, but some things are unavoidable.

[Spider Jerusalem]

24. Local demand doesn't affect the price of an internationally traded commodity.

Especially not when more than half of domestic consumption comes from imports.

[pinto]

27. Yeah, I figured it was an international trading situation. Interesting point about imports.

[benld74]

9. Future traders and speculators

http://www.cbsnews.com/8301-505123_162-57383435/high-gas-prices-are-traders-to-blame/

But it appears rising gas prices are mostly due to the work of Wall Street speculators and traders -- not any increase in demand, according to a new report from Yardeni Research.

Since each contract is for 42,000 gallons, or 1,000 barrels, of gas, and gasoline inventories in the U.S. stood at 232 million barrels, "speculators and traders, in effect, held a record 43.8 percent of U.S. inventories," Yardeni says.

The economist says speculators must be betting that the confrontation with Iran will worsen, pushing gas prices still higher. "They certainly can't be betting on strong U.S. demand for gasoline," says Yardeni. Over the past year, gas usage fell to its lowest since Nov. 28, 2003

They're betting on Iran confrontation!!!!!!

[Motown_Johnny]

10. because people will pay it

the same as always

[RKP5637]

17. Same for food prices ... recently I was looking at the price of meat for some of the

cuts and I was wondering who TF buys this stuff at $24/lb. ... but apparently they do ...

[Duer 157099]

13. Because too many of us can still afford food

Their goal is to take every last cent until we starve to death.

[sinkingfeeling]

14. Speculation and the increasing export of refined fuels out of the USA.

[Initech]

16. The CEO of Goldman Sucks needs a new yacht.

[RKP5637]

19. Here's a good one for him!!!

http://www.gizmag.com/yacht-designs-floating-island-megayacht/19309/picture/138492/

"Owning one's own yacht must surely be one of man's greatest indulgences. The ability to take your own tailored environment anywhere you want. Yacht Island Design creates tailored environment like no other. Following on from its "Streets of Monaco" design is the "Tropical Island Paradise", a 90 metre island with a top speed of 15 knots. The main deck is a beach “cove” of cabanas surrounding a massive ocean view swimming pool, with a waterfall falling nearby from the volcano. A bar area, outdoor dining, there's a private spa and four VIP suites for friends, all with their own private balcony. Great image gallery"

[BadgerKid]

18. Third day of increases here; now up $0.50 overall. Feh. n/t

[ohiosmith]

20. Taco Bell is charging more!

[backscatter712]

21. Two reasons...

Official Party Line: Those EEEEEEEEEEEVIL Iranians might be building a bomb somewhere, even though the IAEA says they're not, and there could be a war that threatens to close the Strait of Hormuz and shut off the oil spigot from Saudi Arabia.

Real reason: Oil speculators buying up futures and manipulating the markets to cash in. And using the Iran thing as an excuse.

[savalez]

23. Thank you all for your input.

I appreciate it.

[spanone]

30. the oil industry is punishing Obama over the pipeline delay...

[bhikkhu]

35. All sorts of possible narratives and contributing factors

...this is the one I think is most pertinent to the future



where you have an inability to increase the rate of production over the last 8 years, in spite of very high prices. The average cost of production has also been rising every year:



All of which is typical of a resource on its depletion curve. Complaints and theories are easy to understand, but the physical reality suggests that the price is going nowhere but up, and supply (more and more difficult to extract) will only keep coming if the price keeps rising.

[JNathanK]

36. I just think its that a few transnational corporations have a monopoly on the main fuel source,

...and they charge as high as the market will bare when it comes retail pricing. It seems they use any type of natural disaster, economic downturn, or political tension in the world as a pretense to raise gas prices. Those trading in oil, or any raw commodity for that matter, have a fetish for human tragedy, because that means big bucks for them when it happens.

I personally think that the Iraq war was about cutting a major source of oil off in the world to create scarcity, which benefited oil companies. That's why gas prices shot up so much during the Bush years.

[GeorgeGist]

37. Greed.

It's not a theory.