the libtards ought to be proud.

NEW YORK — Gasoline prices have never been higher this time of the year in the U.S.

At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.

"You're going to see a lot more staycations this year," says Michael Lynch, president of Strategic Energy & Economic Research, referring to people staying at home on their vacations. "When the price gets anywhere near $4, you really see people react."

Already, W. Howard Coudle, a retired machinist from Crestwood, Missouri, has seen his monthly gasoline bill rise to $80 from about $60 in December. The closest service station is selling regular for $3.39 per gallon, the highest he's ever seen.

"I guess we're going to have to drive less, consolidate all our errands into one trip," Coudle says. "It's just oppressive."

The surge in gas prices follows an increase in the price of oil.
Oil price surge could dampen recovery

Oil around the world is priced differently. Brent crude from the North Sea is a proxy for the foreign oil that's imported by U.S. refineries and turned into gasoline and other fuels. Its price has risen 11 percent so far this year, to around $119 a barrel, because of tensions with Iran, a cold snap in Europe and rising demand from developing nations. West Texas Intermediate, used to price oil produced in the U.S., is up 4 percent to around $103 a barrel. That's 19 percent higher than a year earlier.
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Higher gas prices could hurt consumer spending and curtail the recent improvement in the U.S. economy.

A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That's only 0.2 percent of the total U.S. economy, but economists say it's a meaningful amount, especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession.

High oil and gas prices now set the stage for even sharper increases at the pump because gas typically rises in March and April.

Every spring, refiners suspend operations to switch the type of gasoline they make. Supplies of wintertime gas are sold off before March, when refineries need to start making a new formula of gasoline that's required in the summer.

That can mean less supply for service stations, resulting in higher gas prices. And summertime gasoline is more expensive to make. The government mandates that it contain less butane and other cheap organic compounds because they contribute to the formation of ground-level ozone, a primary constituent in smog. That means more oil, a costlier component, is needed to produce each gallon.

The Oil Price Information Service predicts that gasoline could peak at $4.25 a gallon by the end of April. That would top the record of $4.11 in July 2008.

The national average for gasoline began the year at $3.28 a gallon. The average price for February so far is $3.49 a gallon. That's up from $3.17 a gallon last February, a record at the time. Back in 2007, before the recession hit, the average for February was $2.25 a gallon.

Prices are higher on the East and West Coasts, where gasoline has risen above $3.70 in Connecticut, New York, Washington D.C. and California. This isn't unusual — states on the coasts charge some of the nation's highest gas taxes.

High gas prices put a strain on many people's budgets.

Americans spent 8.4 percent of their household income on gasoline last year when gas averaged an all-time high of $3.51 a gallon. That's double the percentage a decade ago. They could pay even more this year, even though demand is the lowest in 11 years as people drive fewer miles in more efficient cars, says Tom Kloza, chief oil analyst at OPIS.

Gary Goodman commutes into Manhattan from Edgewater, New Jersey, because gas, tolls and parking make the cost of driving prohibitive.

Goodman, an accountant, commutes by bus. He uses his car mostly for trips to the grocery store or for occasional nights out. He says he has no choice but to eat the higher gas costs.
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"I already drive as little as possible," he says.

Paul Dales, a senior economist at Capital Economics says it would take a bigger shift in the global economy — say, a deep recession in Europe or a slowdown in Asia's manufacturing — for pump prices to drop noticeably. Either event would slow oil demand, depressing prices.

But experts expect demand to keep rising. World oil demand is expected to increase by another 1.5 percent to 89.25 million barrels a day in 2012, according to the Energy Information Administration.

In the short term, tensions with Iran are feeding fears that oil supplies could be blocked.

The U.S. and Europe are tightening economic sanctions against Iran over what the West believes is Iran's attempt to build a nuclear bomb. World leaders fear Israel may be planning a strike against Iran, the world's third largest oil exporter.

In response, Iran has threatened to withhold its own oil deliveries and to block the Strait of Hormuz, a waterway along its coastline through which one-fifth of the world's oil flows.

On Friday, an international banking clearinghouse crucial to Iran's oil sales said it is prepared to discontinue services to Iranian financial institutions being targeted by the EU and U.S. sanctions. That could ratchet up the pressure on Iran, but also send oil prices soaring.

The price of Brent crude fell 53 cents on Friday to $119.58. WTI gained 93 cents to $103.24.

Gas prices are already an issue in the presidential campaign. Republican candidate Newt Gingrich spoke several times this week about opening up more federal land to oil and gas drilling as a path toward U.S. energy independence — and lower pump prices.

"Our goals should be to get gasoline to $2.50 or less so that working families can actually get to work and retired families can travel," Gingrich said at a campaign event in Los Angeles Thursday.

Aside from Gingrich being a twat, what has gas prices got to do with politics? Other than maybe the oil companies spend enough money to make sure they have both parties in their hip pocket?

Did you miss this paragraph? Seems it should be a hot political topic.

Americans paid $100 Billion more for gas in 2011 than they paid in 2010.

Salmo, did you forget all of the Dems blaming Bush for high gas and oil prices?

Curiously, it's not a topic they're bringing up now.

Must have been Cheney, that bastard.

If wages went up at the same rate as the Cost of living, the percentage of income spent on gas would have been lower and more in line with last year and it also indicates that one if not both wage earners in the household might not be employed anymore, where are the job creators?

One fill up for me is 11% of my monthly net paycheck. It takes $23 worth of fuel just to go to the store and back....

%&$@ing hillbilly hellhole!

@$%&!

Jesus Twitch, what are you drivin, an F350 with 38" monster mudders and the biggets motor
ford has?

Hank, much as I like to blame Bush for just about everything, he and his pal Cheney were only part of the equation regarding oil. There is so much more. Politicians and the oil companies that own them don't want to reduce US dependance on oil because of the profit motive. And American citizens won't demand more of the politicians due partly to apathy and in large part because they suffer the illusion, like Twitch for example, that it can and should be feasible to drive single occupant gas guzzlers at an affordable price. That is an increasingly unrealistic expectation, but the illusion doesn't budge.

I'd support a $1.00 to $1.50 a gallon additonal gas tax (and dedicate it to transportation infrastructure and national debt reduction) just to force additional elasticity of demand among the American public. Not to be too much of a conspiracy theorist I think the oil companies oppose that because they can maximize profit by keeping the price near the upper limit of mass public tolerance without causing a significant shift toward energy alternatives. What supports this line of thought? Among other things, the lack of any plan for any additional oil refineries in the U.S. and that oil is increasingly being exported, rather than consumed domestically via retail price reductions.

But yeah, Bush was and forever will be the chief ratfvcker for reasons to numerous to list.

Sg

Try selling asphalt paving during these times of rising oil/gas prices.not fun.Good luck,
SZ

Add estimating into that too, SZ, I've bought several paving jobs in the last year

I too wondered why there were no new oil refineries in the U.S. My thought was regulations on new construction was making it cost prohibitive. That may be part of the reason but the actual reason is existing refineries are expanding production. Call it consolidation; call it closing down money losing operations; call it whatever you want. The number of operating refineries has fallen from 254 in 1982 to 137 in 2011. The operating capacity of today's 137 facilities is over 830,000 barrels per day more than it was in 1982. Basically, while we've watched 117 refineries close, capacity has risen. Since 1985, when refinery capacity hit a low of 14.7 million barrels per day, we've seen over three million barrels of capacity added, or the equivalent to 23 average modern day facilities. So while we haven't seen new refineries open in new locations, we have virtually added the capacity of 23 of today's average size facilities.

One of the downsides to the closing of refineries is the loss of storage capacity. By a wide margin though, the single most important factor in the swing to net oil product exporter is the dramatic decline in US oil consumption from the highs of 2005-2006. At best, the increase in domestic production has been on the order of 500 kbpd (kilo barrels per day). But we've seen our consumption decline nearly 1900 kbpd. (2005 high compared to 2011 average). Indeed, the strong additions to existing refining capacity seen in the middle of the last decade now serve not Americans, but the importers of our oil.

If you were King and added $1.00 to $1.50 to the gas tax, how would you make up for that in increased costs added to consumer goods?

The cost of a product is determined by the market for the product. An increase in the cost of the product does not mean that the consumer pays more. the market, not production costs determine the cost.

I beleve SG is correct on this one too. Having the 3 of 4 oil/ gasoline co.'s is no different than having one. If you don't think that they fix the cost then you need to take off your rose colored glasses.

Go Red Sox,
cds

I've read that three or four times and it still doesn't make sense.

That's cuz the sentence I wrote doesn't make sense. What I meant to say, and clearly didn't, was that if the cost of producing a product goes up, the cost of buying the finished product will not automatically go up.

I think that's clearer.

Go Red Sox,
cds

As the cost of production increases, the cost of buying the finished product won't automatically go up if the producer has no intention of staying in business.

Is that what you meant to say?

No. Not my point. My point is that the market determines the cost of the product, not production cost.

To your point (I think your point), If production costs are greater than the price that the market will bear, the product is no longer viable.

Go Sox,
cds

You are using the word cost in areas that need to be reworded to "price".

Not necessary that the market will determine the cost of the product! The manufacturer ought to be benefited by the cost, otherwise why he will going to be in loss !

Oil refineries are a hell of a long ways from taking a loss .....