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September 29, 2011

More From The Provinces…


California gas prices are falling, but consumers feel little relief. Prices fell 3.6 cents/gal this week to $3.887 – a record for this time of year.

Michael Stell of Foothill Ranch is cutting back on everything he can – driving, electricity, air conditioning. He lost his job and had to settle for one that paid less.

“My dad was an Arco distributor, and I know he must be rolling over in his grave about prices like these,” Stell said. “It seems like they always shoot up a lot over a few weeks, and then they drop a little bit, and very slowly. I don’t fell good about these prices at all.”

Experts say:

“Are the price reductions we’re seeing this week going to make Americans drive more? I doubt it,” said Fred Rozell, director of retail pricing for the Oil Price Information Service. “Not with stagnant personal incomes and such high unemployment, and gas prices still running much higher than they were a year ago.”

Phil Flynn, an analyst with PFGBest Research, said gasoline prices could drop faster and further if Libyan oil returns to the world market by the end of the year

Gas prices aren’t really lower until you feel it,

Filed under:Fuel cost,Gas price | by Pump Girl @ 5:52 pm | 

September 27, 2011

Gas Prices Declining. Can You Feel It?


Didn’t think so. $3.49. $3.60 Gas prices are just higher than the $2.70/gal. you were paying last year.

‘There are expectations that the economy is not going to be as strong or robust as anticipated,” said Fred Rozell, retail director for the Oil Price Information Service. “An economy that is using less petroleum products, that drives the price down.”

Gas prices will probably follow the price of oil down, but hold onto your wallet for Thanksgiving and Christmas.

Even though the so-called ‘cheaper gas’ helps. Will it really boost the economy?

In my dreams

Filed under:Fuel cost,Fuel Price Trends,Gas price | by Pump Girl @ 5:24 pm | 

September 25, 2011

Can Oil Prices Reach $500 per Barrel?


With energy prices falling, most observers relax. Understanding energy prices requires a deeper understanding of fundamental factors.

There is also the matter of time frames. In the short term prices may be softer, responding to global factors like the currency trade or perceived economic weakness. We need to put this in a broader perspective.

Here is the observation of John Taylor, head of the largest and most successful currency hedge fund:

In five years, he says, “we could see oil at $500 a barrel. I would be a buyer on dips of oil.

His bold prediction could be wrong, but it is worth considering. Here at Pumps we agree with the basic thesis — long term strength in energy prices, current weakness presenting an opportunity.

Filed under:Ask Jeff,Fuel Price Trends | by OldProf @ 8:31 pm | 

September 22, 2011

Why We Pay Special Attention to Gas Prices


Think about it. The price of everything is going up (with the exception of electronics) – bread, milk, eggs, clothing, cars. Why should gas prices be special?

Here’s Dan Ariely’s take from the Predictably Irrational Blog:

So why does the amount we spend on gasoline feel so enormous? I think it is because of the way we buy gas.For the several minutes that I stand at the pump, all I do is stare at the growing total on the meter – there is nothing else to do. And I have time to remember how much it cost a year ago, two years ago and even six years ago.Yet I have no such memory about the prices of items in any other category. I have no idea how much milk was six years ago, how much bread was three years ago or how much yogurt was a week ago. But I suspect that if I stood next to the yogurt case in the supermarket for five minutes every week with nothing to do but stare at the price, I would also know how much it has gone up – and I might become outraged when yogurt passed the $2 mark.Another odd thing about the way we buy gasoline is that we usually buy multiple units. I just bought 13 gallons for a little more than $55. The sticker shock isn’t as intense when I see the price per gallon as it is when I’m faced with the total cost. Fifty-five dollars! I remember when I filled my tank for $20 and $25 and $30! Maybe if we bought 13 loaves of bread at a time or 15 gallons of milk we might become just as sensitive to how much we spend on those items.While we concentrate our anger on gas prices, we are ignoring increases in electricity, food and health insurance – expenses that might actually have a greater effect on our budgets.

Cha-ching! cha-ching! You know, I think he’s right about this!

Filed under:Fuel cost,Gas price | by Pump Girl @ 11:47 am | 

September 20, 2011

2011 – Record Year of Pain for Gas Prices


By the end of the year, US motorists will spend $491 billion on gasoline ( give or take a few $100,000) -the most ever.

Oh, gas prices might go down for a bit when refineries switch over from the summer blend, but probably not for long.

Per Tom Kloza, OPIS:

“The 30 days between now and mid-October will be the most hospitable days in the country for dropping prices,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. “But then the drumbeats will start about fears of a second Arab Spring. Demand outside of Europe and the U.S. continues to rise. By spring, Americans will be wrestling with $4 gasoline in a lot of markets.”

Kloza sees no collapse in prices for the rest of the year.

Reaction from a typical woman on the street:

Carol Hill, a 25-year-old Los Angeles resident who waits tables in a restaurant on the Third Street Promenade in Santa Monica, said she was disgusted that she had to pay $3.95 a gallon to fill up her 10-year-old Honda Accord at a BP-Arco station on Lincoln Boulevard near Ocean Park Boulevard.

“The price of gasoline always goes up every year and never falls by as much. So, every year the price is higher. There’s always some excuse someone has. All I know is that I’ll be very happy the day someone hands me the keys to an electric car,” Hill said.

Our gas supplies are not growing even though demand is weak. Why? We are exporting it, of course.

Filed under:Fuel cost,Fuel Price Trends,Gas price | by Pump Girl @ 1:47 pm |