Rising gas prices (2014, to buy, luxury)

[Rick Lee]

Originally Posted by las vegas drunk

The Federal Reserve is printing 85 billion dollars a month to keep this phony economy going. In turn this is devaluing the dollar. I personally am happy that gas prices are as low as they are considering this.

+1000

Gas prices will continue to climb for as long as oil is still traded on the world market in US Dollars, which might not be much longer, since we're printing them faster than Monopoly Money. The USD loses value every day and so the price of gas climbs to offset that.

[Ponderosa]

The recent run up in gas prices has nothing to do with the dollar. It has been caused by refinery issues, increased demand, and MOSTLY by speculation by hedge fund managers in the refined products markets. It won't last.

[jimj]

Originally Posted by Ponderosa

The recent run up in gas prices has nothing to do with the dollar. It has been caused by refinery issues, increased demand, and MOSTLY by speculation by hedge fund managers in the refined products markets. It won't last.

Really? Yes there are short term reasons but you'll also notice the price has not dropped a whole bunch after those short term issues are over.
From Why Are Gas Prices So High
"Rising gas and oil prices over the long-term are caused by a decline in the value of the dollar. Since oil is denominated in dollars, the 40% decline in the dollar in the last six years puts upward pressure on oil prices."

[Ponderosa]

Originally Posted by jimj

Really? Yes there are short term reasons but you'll also notice the price has not dropped a whole bunch after those short term issues are over.
From Why Are Gas Prices So High
"Rising gas and oil prices over the long-term are caused by a decline in the value of the dollar. Since oil is denominated in dollars, the 40% decline in the dollar in the last six years puts upward pressure on oil prices."

I said the RECENT run up. You seize on one comment in your article and blow its significance completely out of proportion and beyond what the author implied. There are other, far more significant factors at work in the RECENT run up than the dollar fix. And I will reiterate, the prices are not sustainable and are out of sync with supply/demand factors. They will be coming down. Will they go back to 2 bucks a gallon? No, and milk won't go back to $1 and your wages won't go back to $1.25 an hour either. Based on inflation, gas is still at the same price it was in the 80s. Not only that, but you can buy a car that gets 40 mpg now too.

Overall, gasoline costs today are a much smaller fraction on the family budget than they were years ago. That doesn't make pain at the pump less, but if you need to get angy, get angry at regulatory changes that allowed oil and gas to become speculative commodities and at the hedge funds that jump in at every hiccup in the supply chain and inflate prices.

[jimj]

Originally Posted by Ponderosa

I said the RECENT run up. You seize on one comment in your article and blow its significance completely out of proportion and beyond what the author implied. There are other, far more significant factors at work in the RECENT run up than the dollar fix. And I will reiterate, the prices are not sustainable and are out of sync with supply/demand factors. They will be coming down. Will they go back to 2 bucks a gallon? No, and milk won't go back to $1 and your wages won't go back to $1.25 an hour either. Based on inflation, gas is still at the same price it was in the 80s. Not only that, but you can buy a car that gets 40 mpg now too.

Overall, gasoline costs today are a much smaller fraction on the family budget than they were years ago. That doesn't make pain at the pump less, but if you need to get angy, get angry at regulatory changes that allowed oil and gas to become speculative commodities and at the hedge funds that jump in at every hiccup in the supply chain and inflate prices.

I no longer get angry at things like this that I have absolutely no control over except by controlling how much I buy. I agree with you about the speculators and personally believe they should have to take possession of what they buy when they buy it until they can sell it to make their profit instead of just purchasing "air".

My point was that the long term affect to the price due to the drop in the dollar adds to any recent run-up preventing it from coming back down to levels that existed prior to the temporary events (hope that makes sense). Sorry if I was unclear.

[Potential_Landlord]

I'm so sick and tired of whatever are the excuses du jour for rising gas prices and rising crack spreads. There is an easy solution to this: let's build a gas-to-liquids refinery in Arizona. We now have abundant natural gas in the US thanks to our shale. Natgas supply is now 100% reliable and there will never be disruptions of political, terrorist or whatever nature. Instead of cracking down crude to gas as in traditional refineries we can elongate the natgas chains to the length of gasoline hydrocarbons. The technology for this is at least 50 years old and completely under control. With this, we cut out any excuses for higher prices or spreads and remove any risk outside the borders of our nation. I guess that would be too easy, though.

[11Hungrybb]

What happened to the refinery that was being planned near the border?

[Ponderosa]

Originally Posted by Potential_Landlord

I'm so sick and tired of whatever are the excuses du jour for rising gas prices and rising crack spreads. There is an easy solution to this: let's build a gas-to-liquids refinery in Arizona. We now have abundant natural gas in the US thanks to our shale. Natgas supply is now 100% reliable and there will never be disruptions of political, terrorist or whatever nature. Instead of cracking down crude to gas as in traditional refineries we can elongate the natgas chains to the length of gasoline hydrocarbons. The technology for this is at least 50 years old and completely under control. With this, we cut out any excuses for higher prices or spreads and remove any risk outside the borders of our nation. I guess that would be too easy, though.

Why not just use CNG - at least in fleets and OTR trucking? Sure, we need delivery infrastructure, but it looks like gas is here to stay and worth the investment.

[Potential_Landlord]

Originally Posted by Ponderosa

Why not just use CNG - at least in fleets and OTR trucking? Sure, we need delivery infrastructure, but it looks like gas is here to stay and worth the investment.

Temporarily, CNG is the way to go until the GTL infrastrucure is in place (2018/19?). But economies of scale clearly say do a centralized refinement close to gas production fields and move fuel as liquids (much cheaper than moving a gas). Besides, it is more convenient and safer.

[Desertspiritsteve]

I am driving my Ford Escape less and my Fusion Hybrid more these days. I have been reading about the new Toyota Avalon Hybrid that gets combined mileage of 40. The Avalon has always been Toyota's old folk's car and is as luxurious and big as a Buick. I agree with my favorite right-wing curmudgeon Bill Wattenburg that natural gas in cars is the way to go right now. I had checked into this and Southwest Gas was offering to install a natural gas station in your home for your car for no charge at all. I don't know if they still offer this. About the only natural gas car available was the Honda Civic GX, and I don't know if this was a dual fuel car. I am putting in a link to Wattenburg's letter to the President.

Bill Wattenburg