So did gas prices merely dip for the election

[malaise]

What explains these sudden increases?

[Blue_In_AK]

1. They're going up because summer is approaching

and more people will be on the road.

[malaise]

2. So they're going up in anticipation of demand rather

than demand. Strange economics!

[Lone_Star_Dem]

22. Yep. That's how they play the game

In the summer they have to provide a cleaner grade of fuel that cost around 5-7 cents more per gallon. Yet the increase we see at the pump each year greatly exceeds that amount. That future increase in pricing coupled with the recent report regarding the size of the US reserves effects the current pricing.

Insane isn't it?

[Dr.Phool]

14. Summers, like what? Four months away?

Natural gas will go up next month in anticipation of winter.

[tammywammy]

28. Spring Break is next week here

or at least within the next couple/three weeks.

[sarcasmo]

3. This initial jump is for the spring breakers. The next jump will be Memorial Day.

Three dollars a gallon nationwide, should be back by June first. Has been like this for the last six years that I have been keeping track.

[Rude Horner]

5. Yeah, but doesn't it seem like the jumps are getting bigger?

I mean, a price spike for a holiday or summer used to mean prices going up 15 or 20 cents. Hell, gas prices in my area are up 50 cents from what they were around election time.

[MindPilot]

10. And more frequent

Used to be just the old "seasonal formula change", then it was "transportation costs", then "reduced refining capacity", then it was "terrorism"...

Gee it sounds like a Rethuglican trying to justify a war...

[sarcasmo]

11. Remember they dropped quickly for the election. The greedy bastards will push the price

back up just as quickly. Here in Michigan we always pay more after Memorial Day. The tourists drive up the price. It's all about greed and seeing how high it will go. Looks like four bucks a gallon is possible in San Francisco this year.

[malaise]

6. It's three dollars in several places

today!

[MindPilot]

4. Three things: Greed, greed and greed

I paid 2.999 for regular this morning.

[spanone]

8. Yes, it's working, at 2.26 we thought we were getting a deal.

doesn't take long for the people to adapt. These are smart people manipulating these prices. Playing their customers (you & I) for fucking idiots, with the administrations blessings.

[sarcasmo]

12. Pavlov's Dog I think they call that.

[Dr.Phool]

15. I paid $2.49 about an hour ago.

Just to fill a can for my lawnmower.

Last week I filled the car for $2.16.

[Hubert Flottz]

7. Yes...

The dems need to pounce on this issue and the crooked voting machines!

[Donnachaidh]

9. price fixing

now ALL the stations in my area are within 1 cent of each other.

The RaceTrac went up 30+ cents in 2 days last week. They are now as expensive as the Shell station that was always 20 cents a gallon more expensive.

Gotta beat last year's recrod profits, I guess. :shrug:

[Dr.Phool]

17. I took a new Prius for a test drive 2 days ago.

I wasn't thinking about buying for another couple of months, but I got a coupon for $5,000 on a new Toyota today.

Might be happening sooner.

[ClintonTyree]

20. How does one obtain a coupon for $5,000 on the purchase...

of a new Toyota? I'd like to get in on that action myself. :shrug:

[Donnachaidh]

26. what was the sticker price?

And how did you like the Prius? We're really thinking of getting one.

[TomInTib]

13. When regular unleaded is cheaper than diesel, something is fishy.

Diesel fuel is far cheaper to produce than is unleaded.

Any time you see diesel priced higher than unleaded, there is some manipulation going on.

[spanone]

19. It amazes me that there hasn't been a peep from truckers...not a peep.

[tammywammy]

25. It has to do with the new ULSD

The ULSD started rolling out last October. It costs more to produce it. And at the same time we were headed into the winter. The demand for diesel goes up in the winter, due to heating oil.

I expect to see diesel prices to fall a little once the switch over to summer diesel is complete.

[Atman]

16. Bush is mad at us.

He and Unka Dick know they're cooked. They're just raking in a few more billion before they have to skulk away behind their compound wall to count their ill-gotten gains.

.

[onenote]

18. how do you explain the fact that prices were lower at the end of January

(after the election) than at the end of October (just before the election).
Seems like what impacts the price is a bit more complex than simply the election.

[Telly Savalas]

29. Not to mention explain what benefit the oil companies would have hoped to achieve

if they really had lowered prices just for the election?

Did they think that it would be a sufficient factor to sway the 15 House races that would have been needed for the GOP to maintain control of the House?

Are they that scared of any veto-proof legislation the Democrats will offer?

[Warren Stupidity]

Long term upward trend but

when you look at data points realatively close together you see what appear to be random up and down movements.

Long term trend - population growth plus the development of the fomerly less developed regions of the planet are pushing demand inexorably up while the increase in the supply of cheap oil, having peaked, fails to keep up with this demand. Expensive oil is substituted for cheap oil, and scarcities develop, and the price has to go up.

Feedback - increasing prices dampen economic activity, slowing demand. Thus after a price spike, such as last year's flirtation here with 3-4 dollar gasoline, demand adjusted a bit. People reduced superfluos usage, some marginal businesses fail to survive the increase etc. The end result is that the price spikes up, then it goes down a bit.

After the price eases off a bit the factors that push the long term trend once again dominate and the price starts climbing back up.

You get the few players with any reserve capacity of cheap oil, such as Saudi Arabia, making deals to open or close their spigots for their own self interest. This may indeed have happened prior to the last election, but I think it is more likely that we just were in the midst of a modest down movement in front of the next upswing. Long term the Saudis are going to conserve their oil supplies, getting the maximum windfall benefit from the price increases, and are not going to flood the market simply to keep Bush popular.

[ClintonTyree]

21. And Congress promises to investigate cases of price gouging...

and, as usual, finds nothing untoward as far the BIG OIL is concerned. Go figure! :eyes:

[NickB79]

23. Third-world economies collapsed at $70/barrel oil last fall

As many poor nations were no longer able to import expensive oil, their economies ground to a halt. This freed up a few million extra barrels per day of oil production for nations that could afford it, which is why our oil prices dipped over winter. However, this was just enough to give us a cushion of a few months, because the Chinese and Indian economies continued to grow and demand more oil. Now that cushion is gone, gobbled up by booming demand.

Also, read a bit on the Environment board for a real eye-opener. Oil-producing nations around the world are producing less every year. The giant Cantarell field in Mexico is declining in production, as is the Kuwaiti giant field Burgen, and even Saudi Arabia's crown jewel Ghawar appears to be entering decline. Without these massive fields supplying the bulk of oil demand, the small fields around them can't make up the difference. It would be like trying to live off of the crumbs after your pantry is bare. Anyone who's taken a basic economics class will know what happens when the demand of a product exceeds the supply. It appears we are rapidly approaching this point.

Honestly, there is no question gas will be well over $3/gal this summer. If a bad hurricane hits the Gulf, $4/gal is possible. If we bomb Iran, the sky's the limit.

[Rageneau]

24. Of course they did -- and everyone here predicted it,

Too bad our news media doesn't start worrying about what Anna Nicole would be paying for gas today as a result of the election.

[David Zephyr]

27. Yep and we are two years from the next election. Best time to raise 'em.

And then drop them before election time. It's more cyclic than birds migrating.

[Odin2005]

30. price manipulation and stuff related to changes from the winter to summer gas blend

[lostinacause]

31. People should really look into the economics of collusion if they wish to justify

claims of collusion. Most everything that has been mentioned here about collusion differs greatly with what we would expect. When companies collude (through an agreement) there are strong legal penalties if they get caught including, if I am not mistaken, jail time for the people responsible for the agreements. This means that companies would have little interest in varying prices in a significant manner. Because of the amount of information available through the various markets this kind of agreement becomes very difficult to initiate. In a market with as much volatility as the oil market it is also difficult to reach a collusive agreement. Choosing quantities and coordinating prices becomes very difficult.