"I'd like to know why summer blend isn't required year round ?
Who likes smog?
Maybe cold climates don't have smog problems like hot climates ? "
According to an article on Bloomberg, the US is now the worlds top producer of oil and natural gas, resulting in paradigm shifts in world energy and lowering prices by as much as 40%.
So why are the prices at the pump rising steadily? Three months ago here in Vegas, I was paying $2.29 a gallon for premium at the station down the street. Yesterday I paid $3.59. Same station, same grade of 91 premium. If everything is going so swimmingly, then WTF is up with prices?
Here are excerpts from the Bloomberg article (full article linked below):
U.S. Ousts Russia as Top World Oil, Gas Producer
The U.S. has taken Russia’s crown as the biggest oil and natural-gas producer in a demonstration of the seismic shifts in the world energy landscape emanating from America’s shale fields.
U.S. oil production rose to a record last year, gaining 1.6 million barrels a day, according to BP Plc’s Statistical Review of World Energy released on Wednesday. Gas output also climbed, putting America ahead of Russia as a producer of the hydrocarbons combined.
The data showing the U.S.’s emergence as the top driller confirms a trend that’s helped the world’s largest economy reduce imports, caused a slump in global energy prices and shifted the country’s foreign policy priorities.
Economic Change
In the U.S., the boom in oil and gas production has started to change the economy profoundly. Cheap fuel has seen manufacturing return to the U.S. as the country produced about 90 percent of the energy it consumed last year.
Last year, imports equaled 1 percent of GDP, according to BP’s data. In 2007, just before the financial crisis, U.S. energy imports accounted for about half of the current account deficit of 5 percent of GDP.
Shale drillers from Exxon Mobil Corp. to Chesapeake Energy Corp. spent about $120 billion last year in the U.S., more than double the amount five years earlier. The surge in output and a slowdown in global demand have pushed crude oil prices down about 40 percent in the past year.
While crude oil price is a major piece of the price of gasoline, it is not the only piece. On the west coast there have been some significant refinery outage which have resulted in lower gasoline production and a need to attract imports of gasoline from Asia and Europe. While you could calculate a theoretical price needed to attract the imports, given near term very tight supplies the prices have exceeded that, and should start declining. But over the last few months if you owned a refinery that was running well you made a lot of money on the west coat.
More demand for gasoline in summer, more cars are driving somewhere on vacation.
Black tar crude won't start your car until it's refined.
42 gallons of crude = less than 20 gallons of gasoline.
If not for lipstick and other byproducts when turning crude into gasoline we'd be
paying five bucks a gallon.
Higher demand limited supply usually means higher prices.
Summer blend gasoline helping cut down smog, cost more to refine .
When BP and other petroleum companies are fined millions or billions, they pass those
costs to consumers, the same way grocery stores do when employee wages and wholesale food costs rise.
Every millionaire CEO knows, a few pennies here and there can add up to billions.
If you wonder why Gas prices go up faster when oil prices rise, than they go down when crude prices drop, big profits mean much more to successful companies and their CEO's , than riding roller coasters.
If I'm not mistaken Geographical areas with higher temperatures are required by law to
have lower Reid vapor ratings, another reason why refined gas costs more in California
summer than Vermont.
I'd like to know why summer blend isn't required year round ?
Who likes smog?
Maybe cold climates don't have smog problems like hot climates ?
I've never noticed much smog in D.C. or large East Coast cities, in the summer or winter.
I do smell auto exhaust year round.
I hope gambler is OK, never know when a drunk will crash his car.
He seems a little dim sometimes, though I don't believe he's stupid unless he's pickled .
He probably doesn't drive drunk.
If that's the case he must have a chauffeur.
I'd have a chauffeur too, if I was rich.
I could get drunk at home, if I wanted to, but I don't so I won't.
On my chauffer's day off I'd be driving my electric car, a Rimac Concept One
I'd have a chauffeur too, if I was rich.
I could get drunk at home, if I wanted to, but I don't so I won't.
On my chauffer's day off I'd be driving my electric car, a Rimac Concept One.
"I'd like to know why summer blend isn't required year round ?
Who likes smog?
Maybe cold climates don't have smog problems like hot climates ? "
it is so cars will start when it's cold....in all regions including those in the "warm" climates there are folks at high altitudes who need to be able start their car in the winter at low temperatures. A small fraction of the gasoline, for example in southern California, but that drives the winter specification.
First, looking at historical prices, almost nobody in the past 3 month was paying only $2.29 anywhere in the U.S. for even Regular. Six months ago, yes.
Setting aside for the moment global economic forces, there are about TWENTY different formulas for gasoline mandated by federal regions, States and metro areas. When there is a transition from Summer to Winter blends there can be short term shortages and resulting inordinate spikes in prices in some areas. From the link below, it looks like the recent increases in Nevada were substantially faster than nationally.
In my area, relatively close to Chicago, our prices are typically 25% cheaper than Chicago but for a couple of weeks recently our prices shot up to levels a bit greater than Chicago. We're still no where near the highs of last Summer but then again, it's not Summer yet.
Setting aside for the moment global economic forces, there are about TWENTY different formulas for gasoline mandated by federal regions, States and metro areas. When there is a transition from Summer to Winter blends there can be short term shortages and resulting inordinate spikes in prices in some areas. From the link below, it looks like the recent increases in Nevada were substantially faster than nationally.
In my area, relatively close to Chicago, our prices are typically 25% cheaper than Chicago but for a couple of weeks recently our prices shot up to levels a bit greater than Chicago. We're still no where near the highs of last Summer but then again, it's not Summer yet.
What I'm not seeing is the correlation between a 40% drop in the cost of producing oil, and a corresponding 40-50% increase at the pumps.
because the gasoline price is driven by the marginal cost to supply the product. The price of crude oil may have dropped since last year, but at least on the west coast that does not necessarily mean the MARGINAL cost to supply the product has because of the refinery issues.. But i'm also not sure when there was the 40% drop in the cost of producing and a concurrent 40-50% rise in the gasoline price. The gasoline prices, even today in LA or LV are at or below where they were before the crude price started dropping last year.
which on its face seemed to be be an anomaly for the dates you referenced.
Here's a 12 month graph of current spot crude oil vs. gasoline national average. There is a clear correlation in the trending of both costs. As brought up earlier, there is a much larger spike in Nevada prices during the past 5 months plus this is showing some sort of global average spot price. Actual crude price paid by "your" refineries can vary (by how much I don't know exactly).