Log in or Sign up

$3.00 Gas in U.S. in Summer of 2012? Lower Prices Expected...

Discussion in 'General Yachting Discussion' started by YachtForums, Jun 29, 2012.

You need to be registered and signed in to view this content.

Page 1 of 2

YachtForums, Jun 29, 2012

#1

YachtForums Administrator

Joined:

Dec 22, 2002

Messages:

20,611

Location:

South Florida

Catching up with news because I've been offline for a couple of days, I just came across the best news I've seen in a while...

As prices drop toward $3 a gallon, one expert predicts the end... | www.palmbeachpost.com

(copying this to YF's server in case link is disabled)

As prices drop toward $3 a gallon, one expert predicts the end of sky-high gasoline

Despite predictions of $5 a gallon gasoline earlier this year, prices continue to head downward. Now, $3 a gallon gasoline is a possibility by the end of July.

On Thursday, Palm Beach County’s average price for regular gasoline stood at $3.35 a gallon, and Florida’s at $3.22.

In early April, both the state and Palm Beach County’s gasoline prices reached this year’s high at $3.97 a gallon.

“At this point it does look like prices are going to continue to fall. If they continue to fall at the rates they have been, which is about 5 cents week after week, then it is likely that we could see prices at $3 or below $3 by mid to late July,” said AAA Auto Club South spokesman Jessica Brady.

In fact, one analyst says the era of high gas prices may have ended, and that prices this summer could be the highest motorists will ever pay.

“In the U.S. we are never going to consume the amount of gasoline we did in 2007, probably ever, ” said Phil Flynn, senior market analyst for Price Futures Group in Chicago. “Supplies of oil will be so much more ample, and demand lower. It is the recipe for a new era of lower gas prices.

“I’m not saying we won’t see ups and downs. The highs will be lower, and the lows will be lower,” Flynn said.

Flynn bases his opinion on a number of factors. U.S. gasoline demand is declining. Oil production continues to rise and constantly improving technology will only enhance output. Oil production is growing in Canada, Brazil and elsewhere. More energy use is being shifted to natural gas.

Cars with better fuel economy, such as hybrids, are becoming cheaper and more common. Natural gas vehicles such as the 2012 Honda Civic have debuted, even though it’s difficult to find a station to fuel them.

The slowing global economy, 8 percent U.S. unemployment and an aging population which drives less play roles as well.

“Unless there is a war or some kind of major U.S. currency devaluation…generally speaking the fundamentals for the U.S. gasoline market have changed. If you look at the run-up in gasoline this summer, this could have been the crescendo,” Flynn said.

This year’s run-up was due to market complacency with Iranian oil. Then the market moved to replace Iranian oil because war was feared.

“People started to realize, we don’t need Iran’s oil. Iraq is producing more oil every day, and the U.S. is producing the most oil since the 1960s. If you look at new technologies around the globe, we will be producing more and more oil. At the same time the global economy is slow. It is chugging along,” Flynn said.

Gregg Laskoski, a Tampa-based senior analyst with GasBuddy.com, said the reason for the downward price trend is that that oil and gasoline production are exceeding supply both globally and in the United States.

While Laskoski agrees prices will continue to decline incrementally in the near term, he said it’s difficult to forecast beyond that because too many things can happen.

“If there is a conflict, you will see crude oil prices go sharply in the opposite direction. If there is an adverse weather event that threats the Gulf of Mexico, you could have an immediate disruption on the supply side.”

Laskoski said an outlook that we have entered a new era of low gas prices is extremely optimistic.

“Even if crude oil prices do not change from the level that they are at now, we will have a considerable reliance on oil refineries that are aging, ” Laskoski said.

That was seen on the west coast earlier this year when four out of 12 California refineries closed at the same time and prices rose to over $4 a gallon, Laskoski said.

“Who is to say we can’t see similar types of refinery problems in other areas?” Laskoski said. “Because we are so reliant on these things, we tend to forget just what can happen if things go wrong.”
Click to expand...
Capt J, Jun 29, 2012

#2

Capt J Senior Member

Joined:

Jul 11, 2005

Messages:

14,534

Location:

Fort Lauderdale

If you look back at prices, right before the last US presidential election 4 years ago, for a 6 month period gas was in the low $2's and bottomed at $1.80 a gallon.........well after 6 months it was right back in the mid to high $3 and has held there. While I would love to see the days of gas in the low $2's all of the time, I'm not holding my breath. The only thing that would make that a promise, would be opening up drilling in the US. Either OPEC will cut production, or with all of this Middle East tension going on, oil prices will shoot right back up...... There are so many ticking time bombs over there with North Korea, Iran, Syria etc......
K1W1, Jun 30, 2012

#3

K1W1 Senior Member

Joined:

Sep 30, 2005

Messages:

7,427

Location:

My Office

Capt J said: ↑

There are so many ticking time bombs over there with North Korea, Iran, Syria etc......
Click to expand...

Hi,

Would you care to define the geographical position of "over there"?
YachtForums, Jun 30, 2012

#4

YachtForums Administrator

Joined:

Dec 22, 2002

Messages:

20,611

Location:

South Florida

K1W1 said: ↑

Hi,

Would you care to define the geographical position of "over there"?
Click to expand...

I think he did when named specific countries. The point is, wherever there is unrest, it can create conditions that will effect markets.
travler, Jun 30, 2012

#5

travler Senior Member

Joined:

Oct 14, 2008

Messages:

276

Location:

roche harbor wa

we just took on fuel in seattle and it was just below 3.00 for the first time in a long time

travler
K1W1, Jun 30, 2012

#6

K1W1 Senior Member

Joined:

Sep 30, 2005

Messages:

7,427

Location:

My Office

YachtForums said: ↑

I think he did when named specific countries. The point is, wherever there is unrest, it can create conditions that will effect markets.
Click to expand...

Hi,

I was just fishing for an opinion.

I normally think of over there as somewhere in front of where one is.

Given that the Middle East is well to the East that could be understood, N Korea on the other hand is to the west of FLL, so it is over both fences that a watch needs to be taken if I understand the crux of the post.
Capt J, Jun 30, 2012

#7

Capt J Senior Member

Joined:

Jul 11, 2005

Messages:

14,534

Location:

Fort Lauderdale

K1W1 said: ↑

Hi,

Would you care to define the geographical position of "over there"?
Click to expand...

The Middle East and other oil producing Nations where production could be effected with a conflict resulting from Iran, Syria, or even North Korea that would result in less oil production shortening supply.
brian eiland, Sep 18, 2012

#8

brian eiland Senior Member

Joined:

Jul 28, 2004

Messages:

2,981

Location:

St Augustine, Fl and Thailand

Well I'm over in Asia at the moment, and Bloomberg Businessweek is reporting:

BANGKOK (AP) — Oil rose above $97 a barrel Tuesday in Asia, clawing back some losses after prices unexpectedly took a plunge the day before.

Benchmark crude for October delivery was up 44 cents at $97.06 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $2.38, or 2.4 percent, to finish at $96.62 a barrel on the Nymex on Monday
Oil rises above $97 a day after price plunge - Businessweek

Now I think the USA is seeing prices at the $120 a barrel range. Wonder what accounts for such a big difference??

You don't think it has anything to do with the fact that big oil doesn't want to see the current President re-elected, do you
Kevin, Sep 18, 2012

#9

Kevin YF Moderator

Joined:

Nov 25, 2004

Messages:

3,082

Location:

Montreal, Qc, Canada

And just last week we popped the $1.50/L bubble again...

That works out to about US$5.83/gallon.
SHAZAM, Sep 18, 2012

#10

SHAZAM Senior Member

Joined:

Jan 26, 2008

Messages:

601

Location:

The Ghetto

I've already filled up a couple of times over the last week (in my car) at $4.999. I don't see this changing any time soon.
kkreicker1, Sep 18, 2012

#11

kkreicker1 Senior Member

Joined:

Nov 4, 2011

Messages:

127

Location:

Naples, FL or Saugatuck, MI

Here in the American mid west, gas is still around $3.99 and at the boat docks close to $5.
Berean, Oct 15, 2012

#12

Berean Senior Member

Joined:

Aug 26, 2007

Messages:

305

Location:

Sarasota FL

Diesel at Marina Jack (Sarasota) $4.44/gal today. I paid $3.50 in June. Not liking this trend...
Talon, Oct 16, 2012

#13

Talon Senior Member

Joined:

Mar 5, 2006

Messages:

154

Location:

Devon UK

The UK is still very expensive, for cars and boats.
Current pump price for diesel equates to $9.08 p/gallon, marine pumps are running at the $7.00 mark.

These will be going up, not down, with no reduction likely in the next 9 months.
Berean, Oct 16, 2012

#14

Berean Senior Member

Joined:

Aug 26, 2007

Messages:

305

Location:

Sarasota FL

Talon said: ↑

The UK is still very expensive, for cars and boats.
Current pump price for diesel equates to $9.08 p/gallon, marine pumps are running at the $7.00 mark.

These will be going up, not down, with no reduction likely in the next 9 months.
Click to expand...

Unfortunately as I consider all the current tension in the ME (I.e Straits of Hormuz, etc) I don't see any fuel price mitigating factors either. Sad that everybody but the US appears poised to exploit the oil in the FL Straits, GOM, etc...
K1W1, Apr 3, 2013

#15

K1W1 Senior Member

Joined:

Sep 30, 2005

Messages:

7,427

Location:

My Office
Sign of things to come?

Hi,

This was taken this morning in Holland.

It works out to $8.96 a US Gal
Attached Files:

Gas in HollandToday.jpg

File size:

50.5 KB

Views:

726
brian eiland, Apr 3, 2013

#16

brian eiland Senior Member

Joined:

Jul 28, 2004

Messages:

2,981

Location:

St Augustine, Fl and Thailand

Refinery Capacity

Funny how this 'refinery capacity' is often brought up subject wise when they want to increase the fuel prices here in the USA....just not enough capacity available for a variety of reasons.

But now that they want this new pipe line deal for transporting all that Canadian tar sands oil, 'we have more than enough capacity to refine that oil'....and even enough capacity to refine huge extra amounts to ship overseas.

What a manipulative bunch of ____....these oil companies

Price Manipulation: No Fundamental Reason for Oil to Move Higher?

...and we US taxpayers are paying these MOST PROFITABLE companies subsidies to do their business...unbelievable to be paying VERY profitable companies to do their business.
YachtForums, Apr 3, 2013

#17

YachtForums Administrator

Joined:

Dec 22, 2002

Messages:

20,611

Location:

South Florida

brian eiland said: ↑

What a manipulative bunch of ____....these oil companies
Click to expand...

They have us over a barrel.
Pascal, Apr 3, 2013

#18

Pascal Senior Member

Joined:

Feb 29, 2008

Messages:

8,546

Location:

Miami, FL

Correction: we US taxpayers are NOT paying these MOST PROFITABLE companies subsidies to do their business, they are receiving the same tax deduction every other US manufacturer receives.

The only real subsidies we US taxpayers pay for are the billions of direct funding given to all those so called alternative energy companies.
Navatech, Apr 3, 2013

#19

Navatech New Member

Joined:

Mar 27, 2013

Messages:

89

Location:

Hollywood, FL

Terminology

brian eiland said: ↑

we US taxpayers are paying these MOST PROFITABLE companies subsidies to do their business
Click to expand...

A tax break is NOT a subsidy... A tax break is when you take less then the maximum tax... And these exact same tax breaks are given to other US companies that meet the criteria set for them...

A subsidy is when you GIVE the company money!... Seeing as the government doesn't actually make any money that money that's being given away comes out of everybody's pocket...

I have nothing against "lefty" ideals even though I don't hold with them... After all, it's a free country last time I checked... However, what I object to is using the wrong terms...
brian eiland, Apr 3, 2013

#20

brian eiland Senior Member

Joined:

Jul 28, 2004

Messages:

2,981

Location:

St Augustine, Fl and Thailand

Subsidies, or some other name?

Pascal said: ↑

Correction: we US taxpayers are NOT paying these MOST PROFITABLE companies subsidies to do their business, they are receiving the same tax deduction every other US manufacturer receives.

The only real subsidies we US taxpayers pay for are the billions of direct funding given to all those so called alternative energy companies.
Click to expand...

...just two references among many

1) Fossil Fuel Subsidies in the U.S.
$2.4 Billion: subsidies to the Big Five producers debated and defeated in the Senate in 2011 and 2012

2) Senate Fails to Cut Favors to Big Oil, Once Again

Cutting $2.4 billion in subsidies annually to the biggest companies – BP, Chevron, ConocoPhillips, ExxonMobil and Shell – might seem like a solid initial step. But it’s just the tip of the iceberg. The oil and gas industry receives at least $10 billion annually in special favors.

Big Oil makes money.
Subsidies make sense when they foster the growth of a new industry. They are intended to be a temporary crutch to enable companies to find their footing until they can be competitive on their own. With oil prices exceeding $100 per barrel, U.S. oil production is hugely profitable. The five biggest oil companies made $137 billion in 2011 alone. Most independently-owned companies that produce oil and gas in the U.S. have market capitalizations in the hundreds of millions and multi-billion dollar range.
How is this a sector that continues to need taypayer support?

(You must log in or sign up to reply here.)

Page 1 of 2

XenForo add-ons by Waindigo™ ©2015 Waindigo Ltd.