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July 3, 2012

Gas Prices Set to Rebound as Iranian Tension Increases

 

The Iranian Parliament has set up a joint committee in a new effort to fight against the crippling sanctions that have been levied against the nation by the European Union. Among their proposed legislation: a bill to restrict the traffic through the Strait of Hormuz.

“…the parliament’s national security and foreign policy commission drafted a bill requiring the government to stop oil tankers from shipping crude through the Strait of Hormuz to the countries that support sanctions against Iran, a commission member said on Monday.”

At first glance, it appears as though we’ve seen this movie before. The Iranian government has threatened to shut down the Strait of Hormuz multiple times in the past, even going so far as to simulate the blockade with a series of war games. But the consideration of actual legislation might add some teeth to the otherwise tired threat – or so the market suggests. Today, wholesale prices jumped up 15 cents per gallon over concerns on this very issue. 

Gas prices have been remarkably low recently over concerns about weakening economies in Europe and the United States. The potential risks of sudden price spikes, on the other hand, have so far gone relatively unnoticed. This makes it an ideal time to lock in gasoline prices at today’s lows, without a need to worry about tomorrow’s highs.

Filed under:Fuel Budget,Fuel Cost Control,Gas price,Price Shocks | by Eyes on Energy @ 5:30 pm | 

June 28, 2012

Gasoline Prices Hit 6-Month Low

 

Drought, fires, hurricane, we deserve a little good news! Prices for gas in the US are at a 6-month low. Per AAA, the average price is $3.41/gal. ( In South Carolina, its even below $3/gal)

With all the other problems in the economy though, people are not inclined to drive more.

Just a little FYI–in the months before the 2008 election, a gallon of gas was $4.11.

Filed under:Fuel Budget,Fuel cost,Gas price | by Pump Girl @ 4:00 pm | 

May 28, 2012

Summer Driving Season

 

I saw a great article this weekend on the start of the summer driving season. AP Energy Writer Jonathan Fahey really nails it with this summary:

Our rants about gasoline and the oil industry may not always be based on facts, but one thing is undeniable: Americans are obsessed with the price of gasoline. More than any other good or service we buy.
In the language of economists, the price of gasoline is “salient.” That means it sticks in our brains. Here’s why:
We’re reminded of the price every time we pass a gas station and see those huge, numbered signs. We buy gas every week, unlike bills we pay monthly or a couple times a year. Milk is $4 a gallon, but we buy only one. When we fill up with gas, we spend $50 or more.
And the biggest frustration, which comes into focus as the numbers spin ever higher at the pump: There is no alternative.

The whole article is well worth reading.

It is an interesting time, with several factors in play:

1) Summer driving season has this on people’s minds;
2) Risk is still high;
3) Prices have eased.

This is a great time to think about locking in prices — if you have the ability to do so.

October 25, 2011

All Oil Prices Not Created Equal

 

That explains a lot! Why don’t gas prices go down when the price of oil falls? Which oil price would you be referring to? West Texas Intermediate? Brent?

Right now WTI trades about $20 less than Brent.

Asian demand – more tightly connected to Brent than WTI.

Why should we care? US refiners get a lot of their oil from overseas. You guessed it. More the price of Brent, than West Texas.

Filed under:Fuel Budget,Gas price | by Pump Girl @ 5:40 pm | 

August 5, 2011

Crude Should Follow Dow Transports Down

 

Barry Ritholtz notes in his blog post on Wed. that when the Dow Transports head down, the price of crude will follow. That also means the price of gasoline will go down. Per Barry’s nice graph, we are due!

A 70-mile per day driver will save $1,500 annually for every dollar the price of gas goes down. You do the math for fractions.

Filed under:Energy,Fuel Budget,Fuel cost,Fuel Price Trends,Gas price | by Pump Girl @ 4:52 pm |