whats with the latest gas price jump??

Question

from 2.59 to 2.99 in my area in the last week

Answer 1

With gas costing over $90 a barrel, it's no wonder gas has jumped.

It's gone up about 50 cents here in two weeks (So Cal) to around $3.11 a gallon

Answer 2

Oil prices are based on the value of the US dollar. Thats how its traded globally.

The dollar is extremely weak right now, and we just lowered its value because of the interest rate change. Since oil is traded against the dollar, when the value of the dollar goes down. The commodities traded against it goes up.

Oil dollar? Oil dolllar? Oil wins so its worth more so the price goes up. If oil traded in a different currency it would be low. But it trades in the dollar. The only way price of oil is going down is if the US dollar goes up. ie meaning we quit borrowing money, the more we borrower the worse our currency gets. This is what makes our dollar weak. My girlfriend move from aussie land 2 years ago. I said keep your money there. Saved her about 50,000 by not bringing it over.

Until we stop borrowing money. Meaning we have to stop the war. Expect the dollar to be weak. Extremely weak. The price of oil goes up. So does gold ect.

101 economics

Answer 3

We are not running out of oil.

The price at the pump is driven by a variety of influences.

One, and the most obvious is the price of oil. Oil is currently trading at the highest prices ever. However, there's more going on there. Oil is traded in dollars, and when the value of the dollar falls, as it has been to it's lowest point in many years, it takes more of them to buy oil.

The price of oil is only a small piece of the puzzle. Oil is refined into gasoline and shipped. Labor rates and energy costs affect the cost of refining and distributing. The cost of diesel fuel which powers the trucks also affects the cost of distribution.

Then there's taxes, and gasoline carries a lot of tax, about $.37 federal and State excise taxes per gal., sometimes there's county and city taxes, and there's a State sales tax. Taxes like the sales tax are percentage rates, so the higher the base price of the product the greater the amount paid in taxes.

And then there's speculation. Because oil is a commodity, traded on global trading markets, like other energy, coffee, orange juice, and so on, investors and trading prices affect the cost. When oil costs the United States $93 per barrel to buy for fuel, the actual cost to produce that barrel is much lower. Some economists find that a very large percentage of the cost of oil is speculation.

Then there's the retail price. The fuel retailers can set the price anywhere they want to. Something retailers do, for their investors, is generate weekly sales projections. If by Thursday for example they are below projections they will raise the pump price to make up the difference. As long as the company grows investors invest. So it's vital for the retailer to keep revenue increasing. They can raise the price as they see fit. And if one chain raises the price the others will follow, simply because they can. The rules of supply and demand break down a bit with gasoline. Because you MUST buy it. You MUST get to work. So you WILL pay whatever they charge. It's not like buying a pair of sweat socks, where you could just wait for the sale at Wal-mart.

Then there's environmentalism. Environmental controls place excessive demands on the supply. Fuel consumption is highest in the summer. And cities generally have more strict formulation rules than the country. The problem is that there isn't enough fuel in storage near the city to meet the demand, so it must be shipped from further away. The multiple formulations mean that the refiners must make them all, seasonally, and store enough of each to meet demand, instead of there being one or two universal formulas. This raises the price too.

Incidentally, the United States gets a small portion of it's oil from the Middle East. The largest importer of oil into the U.S. is Canada, followed by Saudi Arabia, and Mexico. The U.S. imports about 20% refined products, not crude. You will often hear about the U.S. dependence on foreign oil. But the U.S. isn't terribly dependent on foreign oil The U.S. is the 3rd largest oil producing nation in the world, behind Saudi Arabia and Russia. The U.S. is the top consumer, using 20.5 million barrels per day. We produce 8.3 million barrels per day, importing the rest, more than half. The U.S. does not export much.

And no, corn ethanol is NOT a viable solution. It is arguably worse for the environment. Gasoline has a energy balance of about 5 to 1, meaning we get 5 times the fuel energy out than it takes to produce it. Corn ethanol has an energy balance of 1.3 to 1, meaning there is barely any energy benefit in producing it. Using corn for fuel greatly increases land usage for agriculture business, one of the most polluting industries, and drives up corn prices. Don't be fooled by the lower pump price either, corn is the most subsidized crop in the U.S. The lower pump price is covered by tax money paid out to produce ethanol. Without the tax subsidy the pump price would be higher than gasoline.

Answer 4

Price per barrel of crude oil is at a record high - about $93 a barrel.


That and the fact the Bears suck.

Answer 5

most of country is looking a jump of 16 cents per gallon. it probably will jump to $3.00 per gallon before christmas! what present from the president he can control price! by cut taxes to it by 1/3 easy!!!

Answer 6

I got gas the other night then the very next morning it went from 2.79 - 2.85 so yeah I noticed a jump ...they really love screwing us but we got to get to work right?

Answer 7

One word: Iran

Answer 8

rhode island checking in at 2.949 up to 3.179 depending on the grade.its on the rise just heard it on the news.

Answer 9

the miracle of oil...they're not making any more of it either so it will just keep going up

Answer 10

2.65 to 2.99