Gas Prices
Gasoline prices are still low by historical norms, but have been slow to drop on seasonal factors. Prices are usually lower in the fall and winter because there is less demand and it's cheaper to make winter-grade gas.
The reason prices have been slow to fall has been the crude oil market. Speculators have driven up the price because they believe OPEC is about to freeze production. Less oil on the market and the price goes up, the reasoning goes.
But is there a good reaso...
Monday's explosion at a Colonial Pipeline facility in Alabama was a much worse mishap than the leak that occurred there in early September. The explosion killed one employee and injured seven others.
Footage from the scene showed the scope of the disaster, sending gasoline futures prices soaring, since gasoline prices throughout the Southeast surged when the pipeline had to be shut down for eleven days in September. The initial assumption was this interruption would be w...
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The national average price of self-serve regular, tracked daily by AAA, dropped below $2 a gallon Monday, to $1.998, for the first time since March 25, 2009.
While drivers in the southeast have been paying well below that for months, motorists in other parts of the country have seen prices fall in recent weeks but are still paying north of the $2 mark.
More than two-thirds of U.S. gas stations are now selling gas under $2 per gallon, and AAA says drivers can find at least...
Gasoline prices are lower for this time of year than they have been in recent memory. Consumers should be pocketing significant savings.
But are they? Gas price website GasBuddy surveyed consumers' fuel-purchasing habits and has concluded that consumers may be saving, but they are actually paying more than they should.
The biggest threats to consumers, the site claims, are procrastination, craving convenience, and being creatures of habit.
How can following long-establishe...
For consumers, the last two years have been “the good old days” when it comes to gasoline prices. A growing glut of oil on the world markets led to huge price declines. That, in turn, dropped gasoline prices from more than $3 a gallon to below $2 a gallon in just over a year.
That move also accomplished something else. It drove most investors out of the oil futures market. In the parlance of Wall Street, oil became a “bear market,” meaning the bet was prices would go dow...
World oil prices are in free-fall once again, hitting levels not seen since the financial crisis of 2008.
Back then, it was fear that the economy was collapsing that drove oil lower. Today, it's the fact that the world has more oil than it knows what to do with.
Reuters reports Brent crude plunged 4% to below $36.40 a barrel for the first time since December 2008. For Brent, that's just 14 cents above the post-financial crisis lows.
Falling oil prices have had a similar ef...
Oil is a lubricant that usually keeps machines running smoothly. Lately, however, it has held an oversized influence over all things economic – and the results have been far from smooth.
When oil prices fell below $30 a barrel last week, world stock markets nearly panicked. While cheap oil is normally seen as a good thing, investors are worried the low price will drive many oil companies out of business, leaving the banks that have made big loans to them high and dry.
Add...
The price of oil has approached $50 a barrel in recent days, a recent high but only half of what it was nearly two years ago.
In that time, consumers and businesses have enjoyed low fuel prices, reducing the cost of a fill-up, as well as drastically reducing businesses' transportation costs.
Oddly, the expected benefit from that to the economy hasn't shown up. Consumer spending has ticked up slightly, but much of that is attributed to a belated rise in wages.
Now, an econo...
July is dead center in the summer driving season. Whether it's a quick trip to the beach or an extended road trip, it's when many families pack up and hit the road.
As such, gasoline demand normally rises in July, and so do gasoline prices. But this is not a normal July.
Even though prices have risen off their early-winter lows, they are well below seasonal norms and are headed still lower, at a time they usually peak. The AAA Fuel Gauge Survey shows the national average ...
Motorists are still enjoying relatively low gasoline prices, but they should keep a wary eye on the price of oil. This week it has marched consistently higher, with Brent crude now topping $50 a barrel.
That's significant because the main reason gas prices are so low is the over-abundance of crude oil. For the last two years, Saudi Arabia has been trying to put U.S. shale oil producers out of business, and it has been fairly successful. The result has been a huge oversup...
The price motorists pay at the gas pump keeps falling, and with less than five weeks remaining in 2015, it appears likely we'll start 2016 with a national average price below $2 a gallon.
According to the AAA Fuel Gauge Survey, today's national average is $2.03 a gallon, down three cents per gallon for the week, 14 cents over the last month, and 74 cents compared to a year ago.
The national average has dropped for 24 of the past 30 days. The biggest contributor to the bre...
He doesn't have many supporters for the measure, either in Congress or out, but Sen. Tom Carper (D-Del.) is pushing for four years of four-cent gas tax hikes to fix the nation's highway funding shortfall.
The Highway Trust Fund is running short of money in part because the current generation of fuel-efficient cars aren't burning as much gas as their predecessors -- meaning that while inflation keeps pushing up the cost of highway construction and maintenance, gas tax rev...
Over the Independence Day holiday, a report about energy independence may have escaped your attention. Because of fracking, the U.S. has overtaken Saudi Arabia as the world's leading oil producer.
A Bank of America report obtained by Bloomberg News said U.S. crude oil production, along with liquid fuel separated from natural gas, was more than 11 million barrels a day in the first quarter of 2014.
That might seem small consolation to consumers who can barely afford to ...
The Commodity Futures Trading Commission, the government agency responsible for overseeing the trading of energy contracts, has taken the unusual step of revealing a six-month investigation into possible price manipulation.
The announcement comes amid a breathtaking spike in oil prices and growing speculation that speculators are a big cause of consumer misery.
"All Americans are significantly affected by high energy priceswhether it's paying more at the pump, or higher co...
Fess up, hybrid owners. You know this deal's too good to last. Drivers of hybrid and all-electric cars have been basically getting a free ride on America's highways and byways. But the good times are about to stop rolling.
In Washington, attempts to pass a new highway bill are stalled more or less permanently despite the best efforts of the concrete lobby, largely because of disagreements over whether to raise the gas tax. This leaves the states to scratch around on their...
Attorneys General from more than 30 states are investigating the underlying cause for sudden and dramatic increases in gasoline prices across the country.
The multi-state probe will focus on the factors that generated the rapid escalation in gasoline prices in days following Hurricane Katrina.
"Hurricane Katrina was an event totally outside human control," Pennsylvania Attorney General Tom Corbett said. "We want to determine if storm-related factors were the only things responsible for this sudden and dramatic jump of prices at the gas pump."
California Attorney General Bill Lockyer announced he will subpoena records from refiners and probe the pricing practices of gas station owners in his state.
Hurricane Katrina has broken families, devastated communities and destroyed lives, said Lockyer. Its during times such as this that its most important we pull together, act with one heart, and rebuild with a sense of community. To unjustly profit from tragedy is unconscionable. I hope this investigation does not find that such greed has afflicted oil companies and gas station operators in California.
In Florida, Attorney General Charlie Crist has sent teams of investigators and sworn law enforcement personnel from his office to locations throughout the state to look into complaints of price gouging on the price of gasoline.
Crist said investigators will be looking to determine whether the rapid rise of gas prices meets the legal definition of gouging, and vowed to prosecute any violations of the law.
As of 1:00 p.m. Friday, the Attorney General's toll-free consumer hotline had received 1,050 complaints about skyrocketing gas prices in the days since Hurricane Katrina ravaged the Gulf Coast.
"When we hear of 75- to 90-cent price spikes within two days, or reports that surcharges are being tacked onto consumers' fuel costs, then it is our duty to investigate," said Crist. "Floridians understood that damage from Hurricane Katrina would lead to some disruptions in fuel supply and some cost increases, but these spikes lead to legitimate questions that must be answered. Gouging will not be tolerated."
Alabamas AG, Troy King, said What we have seen in the last few days is a crisis unfolding throughout America and particularly in the Southeast -- on top of the terrible natural disaster of Hurricane Katrina -- with gas prices rocketing to such a degree as to create serious allegations of price gouging."
Other Attorneys General and I are committed to getting clear and understandable answers about why gas prices have risen so rapidly and dramatically, and if the law is being violated, we will take action," said King.
Gas prices have spiraled to more than $3.00 per gallon across much of the country since Hurricane Katrina smashed into the Gulf Coast earlier this week.
Attorneys General from more than 30 states are investigating the underlying cause for sudden and dramatic increases in gasoline prices across the country.
The multi-state probe will focus on the factors that generated the rapid escalation in gasoline prices in days following Hurricane Katrina.
"Hurricane Katrina was an event totally outside human control," Pennsylvania Attorney General Tom Corbett said. "We want to determine if storm-related factors were the only things re...
When the price of gasoline goes down, as it has since August, consumers typically don't question why. They just fill up and consider themselves lucky for now, waiting for the inevitable price spike.
A month ago the national average price of self-serve regular was $3.40, which was down significantly from the month before. But today the average price is below $3.20 a gallon, with motorists paying well below $3 in a handful of states, according to AAA.
It provides a nice break for consumers heading into the holiday season, but can it last? It just might.
In an exclusive this week, Reuters reported that Saudi Arabian oil officials have privately told industry colleagues they would be comfortable with lower oil prices for an extended period of time.
For years the world price of oil has hovered north of $100 a barrel. The Saudis reportedly said they wouldn't mind if the price continued to fall, to between $80 and $90 a barrel.
2 year respite?
There are many factors that affect the price of gasoline but the price of oil is a big one. If oil sold between $80 and $90 a barrel for an extended period – and the Saudis are reportedly talking about 2 years – then the price of gasoline should remain at present levels, or even drift lower.
Why would Saudi Arabia, which depends on its oil revenue for nearly all of its income, so willingly accept lower prices? Do they finally feel sorry for U.S. consumers? Hardly.
Because Saudi Arabia is so dependent on oil revenue it has become extremely worried about the shale oil revolution in the U.S., that has dramatically increased domestic production and made the U.S. less reliant on foreign sources. The Saudis see this as a significant long-term threat.
But extracting oil from shale is an expensive process. As long as the price of oil has remained over $100 a barrel, U.S. oil production has been highly profitable. If the price falls below $90, however, it cuts into shale oil profit margins.
There will be less money for research and development. In short, it's a squeeze play.
According to Reuters, the Saudis appear willing to sacrifice short-term profits for a long-term strategy to weaken a competitor. Whether it works remains to be seen but it suggests how potent a force the Saudis consider U.S. shale.
Speculators find oil less attractive
In the meantime, U.S. consumers stand to benefit. Once it becomes clear that the price of oil is on the decline, there will be less hedge fund money in the oil futures market, money that in the past has tended to drive up the price.
But won't rising global economic activity increase demand for oil and drive up the price? That was the reason we were given for oil's price surge in the mid 2000s.
It's a different story now, with economic activity slowing world-wide, especially in Europe. The supply and demand factor seems to be favoring the U.S. consumer, at least for now.
Finally, U.S. motorists are benefiting from a strong dollar. The U.S. currency rose sharply in the third quarter and is still gaining strength against other currencies. Since oil is priced in dollars, it takes fewer dollars to buy the same quantity of oil as it did a year ago.
None of these appear to be systemic changes but neither do they appear to be short-term trends. The end result is that filling up might not be quite as painful for some time to come.
When the price of gasoline goes down, as it has since August, consumers typically don't question why. They just fill up and consider themselves lucky for now, waiting for the inevitable price spike.
A month ago the national average price of self-serve regular was $3.40, which was down significantly from the month before. But today the average price is below $3.20 a gallon, with motorists paying well below $3 in a handful of states, according to AAA.
It provides a nice brea...