Gas Price

[ski_resort_observer]

It's that number right there that puts speculators in my cross hairs. Did they honestly believe the economic crash was going to drive demand for oil down to less than 50% of what was needed during the prior summer when the price was $4.09?

Just seems to be far too wild a swing for normal supply/demand forces. Maybe I'm wrong

It was an amazing drop in a short amount of time. Personally, I have yet to hear a logical explanation. I do know there are always several factors in any price change, not just the futures market.

 

[ctenidae]

It was an amazing drop in a short amount of time. Personally, I have yet to hear a logical explanation. I do know there are always several factors in any price change, not just the futures market.

Everything dropped at the same time- spot prices as well as futures. It was a case of no one buying anythign at all, and assuming they wouldn't for a long time. Inventories that had piled up were getting used, instead.

 

[Abubob]

Of course I remember filling my 10 gal tank on my Corrolla for $5.00 but also remember paying $2.00 per gallon $25.00 for a tank and thinking I won't be able to afford it much longer. Ah those halcyon days of so long ago!

 

[Geoff]

I'm daydreaming about compressed natural gas bi-fuel conversion with a compressor in my garage.

 

[ctenidae]

I'm daydreaming about compressed natural gas bi-fuel conversion with a compressor in my garage.

Apparently, the state of NC is now requiring that all of their small engine equipment (mowers, weedeaters, etc etc) be converted to propane canisters.

 

[stek]

CC for gas. Accumulating those points!!!

 

[ctenidae]

Article in Bloomberg showed an analysis (can't remember who did it) that said every 1 cent rise in gas prices equates to $1 billion in consumer spending redirected from retail to gas. I'm not sure how they come to that conclusion, since the US uses an average of 19.8 billion gallons of motor gasoline per year. To my way of mathing, that means $198 million per year per 1 cent change. And that ain't much.

 

[Glenn]

Article in Bloomberg showed an analysis (can't remember who did it) that said every 1 cent rise in gas prices equates to $1 billion in consumer spending redirected from retail to gas. I'm not sure how they come to that conclusion, since the US uses an average of 19.8 billion gallons of motor gasoline per year. To my way of mathing, that means $198 million per year per 1 cent change. And that ain't much.

I saw that too. I think it was the same issue that had the economics of buying a hybrid. And how a 40mpg gasoline engine is a better value.

 

[Geoff]

I saw that too. I think it was the same issue that had the economics of buying a hybrid. And how a 40mpg gasoline engine is a better value.

CNG really makes the most sense for a commuter car. The energy cost is about 1/3 that of gasoline and the country is swimming in natural gas.

You can buy a Honda Civic GX that runs on compressed natural gas for about the same cost as a hybrid. If you have city gas at your house, you can install a compressor for about $4,000. My NStar cost is equivalent to about $1.00 per gallon. In eastern Massachusetts, there are quite a few filling stations though the cost is double what you pay at home if you own your own compressor.

GM is coming out with a bi-fuel Chevy Silverado/GMC Sierra pickup next month. Dodge has a bi-fuel Ram 2500 pickup coming out this summer. It makes a ton of sense as a work vehicle.

 

[riverc0il]

Article in Bloomberg showed an analysis (can't remember who did it) that said every 1 cent rise in gas prices equates to $1 billion in consumer spending redirected from retail to gas. I'm not sure how they come to that conclusion, since the US uses an average of 19.8 billion gallons of motor gasoline per year. To my way of mathing, that means $198 million per year per 1 cent change. And that ain't much.

I just don't see how they come up with that crap. Maybe those on super tight budgets or poor are changing their spending habits. But a good part of the country that isn't living pay check to pay check and has reasonably good finances are not adjusting their spending habits due to paying an extra buck or two at the pump for fuel. I know where they are going with this but I think the more likely result is the money is coming from not saving or perhaps not paying down debts rather than not spending. Or at the very least, the reality lies somewhere in between.

 

[AdironRider]

I just don't see how they come up with that crap. Maybe those on super tight budgets or poor are changing their spending habits. But a good part of the country that isn't living pay check to pay check and has reasonably good finances are not adjusting their spending habits due to paying an extra buck or two at the pump for fuel. I know where they are going with this but I think the more likely result is the money is coming from not saving or perhaps not paying down debts rather than not spending. Or at the very least, the reality lies somewhere in between.

I believe the figure is every .10 rise in gas prices, not .01.

I think you are right on an emotional level. Most people (I fall into this bracket) havent been hit that hard emotionally with gas. I pay what I need to pay and get on with my day.

That being said, on a strictly economic sense, it makes a big difference. Regardless of where the money was coming from, more money spent on gas is less money spent elsewhere in the economy. We are not a country of savers, so it wasn't that. We are approaching debt levels seen pre-crisis these days. So we havent become savers either.

 

[ctenidae]

Interstingly, it seems that Saudi Arabia is about to send "a wall of oil" at us to cut prices. Not sure how 22 million barrels (2 days of total US imports, 20 or so of Saudi Arabia's typical daily imports) is going to really impact prices, but it couldn't hurt. Of more interest in the article is the reactivation of old fields and increased storage outside of the Middle East. What do they know/worry about Iran that we're not paying attention to?

 

[Nick]

What about all the money we saved on heating oil this winter. WTF.