Photo credit: @julesdwit.
A not-for-profit media organization supported by people like you.
Roben Farzad, senior writer for Bloomberg Businessweek, explains why gas prices are on the rise.
Deregulated banks and politically affiliated people like Goldman Sachs have gotten their hands big time into the commodity speculation business owning huge portfolios not only oil but in food & metals. We see higher prices and huge volatility. Thanks to these speculators food has gotten especially expensive affecting poor people in parts of the world where the major part of their income goes to food. Manufacturers also suffer at whim of these computer driven crap players . I know speculation is an essential component in the commodities marketplace with the traditional players. I don't buy into the media propaganda line about typical shortages ie. Iran, Sudan, cold weather in Europe, ethanol, etc. The cause originates in the financial offices of New York & London.
No matter what anyone tells you, if the sticker on the inside of your car door or gas lid says 87 octane or your owner's manual says 87 octane, you should be using only 87 (regular) octane. Its what your engine is designed to use and the MFG knows its product better then any oil company or mechanic. Any higher octane will have absolutely no benefits for performance or longevity for your car. Its the biggest con game going at the pump.
Don't focus on crude. Focus on gasoline.
US produced gasoline is being sent to China. We make it cheaper than anywhere else. And they pay more for it.
to John A
Yes, I loved my 1000 cc Subaru E10. I could fit into it my wife, kid, and even my brother in law, his wife and two kids (and he owned an Audi) AND yet had some room left for the bags and beach umbrellas, etc. And still cruise at 55-60 miles an hour to the beach and back. It was a fantastic little van.
Naturally, the US wouldn't let those in, and then they would be crushed by the SUVs that were being promoted by Detroit and the oil industry.
Per McClatchy article, it is NOT China. Read the "China Demand a Decoy" segment.
China Demand a Decoy
We are constantly reminded that in discussing the oil market we are too U.S.-centric. But by the end of 2011 China was importing only around 5.1 million barrels of oil per day, and that's up from just 4.9 million barrels a day a year earlier. (China imported an average of only 4.79 million barrels per day for all of 2010.) Even if one is still naïve enough to believe that oil pricing is based on supply and demand, those numbers are hardly the stuff that significantly moves oil markets.And so the question that demands an answer is, "Why has gasoline shot up on the futures market by 40 cents a gallon since the first of the year, even though inventories have been building and refinery runs have gone down?"
The truth about the the difference between brands of gasoline. yes there is a difference. and unless you're a molecular chemist you will never know that there is a difference.
as everyone knows, all of the gasoline comes from the same refineries worldwide. the major oil companies charge franchise fees to their branded gas station owners. in order to ensure that the franchisees by their gas from the franchisor, and not from a cut rate gasoline jobber, the major oil companies add a marker chemical to each tank load of gasoline. they add about one test tube of marker chemical to each tank load of gasoline.
That's enough to allow them to test the franchisees' gas to ensure the franchisees are buying their gas from the franchisor. but its not enough to make any difference to your car's engine.
Connecting hjs11211 to jgarbuzz, below.I don't believe you can buy a 1000 CC (1.0 L) car in America. Mine is a 1.2 L and may be the smallest available. But there was for decades, and maybe today, a tax break for gass-guzzling SUV's for which there are maybe 50 million or more in America.
Most, not all, gasoline sold in the US is fungible. Most refineries are on the Gulf. Most refineries make gasoline for all the major oil companies. That gasoline is sent to distribution centers by pipeline. It is at the distribution centers at the other end that oil companies mix in their blend of additives and deliver to local outlets. (Your car would run fine without the additives) There are three reasons why gas is becoming expensive. Supply and demand: Chinese are India are consuming energy like crazy. Refining capacity in the US is down. (Why invest several billion dollars when you don't have to?) Speculators in the futures markets are betting gas prices will be higher and higher. They bid up prices. It's self-fulfillng. They can't loose unless there is some kind of global disruption -- like a recession. Simple solution: Buy a fuel-efficient car. If you have a car that gets 35 MPG, $5 gas is not that big a deal.
2/27/12 McClatchy piece on oil price increases -- yes, Virginia, there are speculative influences on the price. Like, per one 2011 report, 88% of long positions held by those who would never take possession of the crude.
.... Gary Gensler, formerly a Goldman Sachs executive and now head of the Commodities Futures Trading Commission, laid the issue out for all to see. As published by McClatchy Newspapers on June 9, 2011, "Gensler cited May 31 data that show end-users accounted for just 12 percent of the 'long' positions in futures contracts for benchmark West Texas Intermediate crude oil. That means that 88 percent of bets on price hikes for oil were held by financial players - mainly Wall Street investment banks and hedge funds that invest for the ultra wealthy - not interests seeking to use the oil." (My emphasis)
Read more here: http://www.star-telegram.com/2012/02/27/3765797/oil-the-never-ending-story.html#storylink=cpy
Read more here: http://www.star-telegram.com/2012/02/27/3765797/oil-the-never-ending-story.html#storylink=cpy
Also, China's usage simply is not the cause of price increases, and if the XL Pipeline goes through it will absolutely not lower costs for US drivers. Indeed, it will probably mean regional price increases. But higher profits for the Canadian tar sands producers, so not all bad. Riiiiight.
Too bad our Dear Leaders couldn't have added carbon taxes to oil production, to be passed on to gasoline, etc., when the base price was lower. That might have promoted more conservation and demand for higher mileage cars back then, when it might not have hurt as badly for the lower income 99 Percenters. The revenues might have been used for a moon-landing like program to develop alternatives, increase the efficiency and percentage of electricity coming from solar and other renewables. Damn...woulda, coulda, shoulda, eh?
Oh, more recently, too bad our current Dear Leader was so enthralled to Wall Street and the Big Banksters that he couldn't have pushed for more control over speculators. Gee, seems I've read he has executive power over an executive function which he could use without permission of Congress.... Alas, alack.
Cheapest gas Bergen/Passaic: about $3.47 (last paid in Ramsey)* Paterson at FairLawn Ave. bridge* Clifton: Corrado's, Getty Ave.* Elmwood Park, River Rd. at school near Marcal* FairLawn, River Rd.* Ramsey, Franklin Turnpike across from ShopRite and another closer to Lake St., same price, $3.47 yesterday
Oil addiction one of many of our self inflicted wounds Didn't high oil prices contribute to the house bubble burst?
My daughter lives in Prague where they have paid $7-8 a gallon for gas for years. Ditto in the rest of Europe. My son lives in Hong Kong where gas is even more expensive; the last time I was there it was about $12 a gallon. They simply can't understand why we are so stressed out over $4 a gallon, when Europeans pay twice that on proportionally lower incomes.
About the differences between gas brands: years ago I had a customer who was a major piping contractor at the tank farms in Rahway. He tole me that all the tanks are interconnected among various brands. They all swapped product all the time. The product often came through the Colonial pipeline and it wad directed from brand to brand as required. It's all the same stuff. It's all a commodity. 90 octane is the same no matter what name is on the sign.
why do americans waste so much fuel?
1. Gasoline refineries being shuttered. World supply down by 5%.2. US exports lots of gasoline...because our access to cheap natural gas gives us an edge on price.3. Gasoline commodities traders speculating the heck out of existing product.
Crude is $40/bbl under the price in 2008. The driver for the current prices IS NOT crude. Therefore, NOT Iran issues.
When you do your follow-up on gas quality, also touch on the fact that the 3-month/3000 mile oil change is no longer the standard. But try to find a mechanic who will tell you that.
We have to use supply & demand to our advantage - more electric cars lower demand, so the increased supply will lower price
My husband uses an ap that lists all gas station and current gas prices within a specified range (you choose). After using this for awhile, I have to report they are NOT always accurate. There aps can be easily found on the web.
Why is Brian trying to promote conspiracy theories? I don't get it. The only 2 reasons why oil prices are going up is to rising GLOBAL DEMAND from Asia, and due to the Iranian crisis. And will continue to go up. Gasoline now costs $8 a gallon in most of Europe and Israel, and so at $4-$5 a gallon, gasoline is still cheap in the US. And I used to get 40 miles to the gallon in my old 3 cylinder, 1000 CC Subaru van when I lived in Israel back in the 1980s. Gasoline was always more than double the price in the US over there.
The US and other major wheat-producing countries should for an OWEC, or Organization of Wheat Exporting Countries to control the price of wheat and food in the world to retaliate, if necessary.
Oil is a global commodity. What we produce in the U.S has a small effect. Period.
Besides major drilling offshore in the Gulf of Mexico, one of the main reasons that U.S. is now a net oil exporter is because of hydraulic fracturing. OIL - not just natural gas - can be fracked.
Energy Information Administration (EIA) Annual Energy Outlook:
"Similarly, oil production from onshore lands, mainly privately owned, increases by a million barrels per day by 2020, helping to reduce oil imports from a 49 percent to a 36 percent share by 2035. Like natural gas, this increase is due in large part to __shale formations that are accessed with hydraulic fracturing__."
When the price of money is cheap, investors and speculators must find other ways to make money, hence speculation and artificial bubbles: oil, wheat, gold, real estate, etc, etc. In 6 months it will be some other commoditiy.
Sounds like you have the explanation from your guest. China and the rest of the world keeps demand high. It's not just US demand. Demand around the world is good, so prices are up. The fact that US is using less oil may be a *reaction* to higher prices. Suggesting that to the extent it's optional, people are using less.
Is there an app that shows gas stations along with current prices?
Also -- Obama is no enemy of the energy companies. He is allowing drilling (natural gas) on a huge amount of public lands.
I agree with Joel, the caller. isn't it obvious? the oil companies and the republicans have come together. since the economy is getting better every month - oil prices are easy to control and make the public feel that President (and I wish everyone would honor him by using his title) is doing poorly.
Obama weaker on Iran? And you want us to donate money to your statioN?
Bravo Edward, below.-Are there government policies that are being exploited that give us speculation, and that don't need to be in our laws?
As the economy gets better, the value of the dollar goes down. Oil is the only commodity sold world-wide in dollars. So, that means it takes more dollars to buy a barrel of oil. It's the same problem it was before the economy collapsed - chose your poison.
And, it's not true capitalism if foreign sources control the flow amount. Supply and demand can't work as it should.
Coming from an oil rich country, I can tell you - the rising price of gas has nothing to do with lack of supply, or the actions of oil companies or countries.
Wall street spectulators and trader are hiding behind a potential conflict with Iranian to make a mint on oil futures.
Jass Gas17 US Highway 46 W, Lodi, NJ(973) 253-0755 I think is the cheapest about 3.45 cash
All of these "spikes" are basically due to speculation.
What we really need is a 100% tax on profits from the sale of petroleum hedges and futures.Airlines and farmers can still use futures contrracts, but speculators would no longer have reason to purchase them.
In SW Westchester, best price is at the station on Post Rd at the bend, in Larchmony.
The main reason that Republicans can go around saying that gas prices have skyrocketed since Obama took office is that they plummeted in the second half of 2008. That was due largely to the total economic collapse at that time reducing demand. That being said, I don't suggest total economic collapse as a campaign strategy.
I really don't understand why everyone gets worked up over gas prices, it's ridiculous. Even a hike of 25cents a gallon results in only about $3 for a full tank in an average car. In a world of $5 coffee and $2 waters (which should be FREE) I don't see why the Nation seems to unravel every time gas goes up a bit. I own a car and am not "wealthy" but can tell you that gas prices are not even on my radar of things I worry about. My family in Europe pay almost DOUBLE what we pay for gasoline and yet they pay a minuscule fraction of what we pay for medications, healthcare and fresh vegetables. It's clear as a Nation where our priorities are.
Email addresses are required but never displayed.
Brian Lehrer leads the conversation about what matters most now in local and national politics, our own communities and our lives.
Subscribe on iTunes
WNYC 93.9 FM and AM 820 are New York's flagship public radio
stations, broadcasting the finest programs from NPR, PRI and American Public Media, as well as a wide range of award-winning local
programming. WNYC is a division of
New York Public Radio.