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The Almighty Buck United States

U.S. Gas Prices Continue To Fall 398

Posted by timothy
from the just-when-I-stop-driving-so-much dept.
First time accepted submitter nmpost writes "Earlier this year, as gas prices hit record highs in the winter and spring for that time of year, experts warned we were headed for all time records this summer. Something strange happened before every motorists recurring nightmare happened: gas prices actually started dropping. In fact, prices have fallen over $.50 since they peaked in the spring. Experts have now flipped their projections, and believe prices will continue to tumble through the fall."
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U.S. Gas Prices Continue To Fall

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  • Or wholesale? FP, by the way.

  • by Squiddie (1942230) on Saturday June 23, 2012 @08:32PM (#40425231)
    But a lower price will drive up demand again, no? I'm thinking this is why prices fell, because people were expecting the worst and cutting back on travel.
    • Re: (Score:3, Interesting)

      by Anonymous Coward

      Prices fall because of presidential elections. My super paranoid conspiracy theory is that oil and gas companies do not want to be the subject of discourse during the elections.

      • Re: (Score:3, Interesting)

        by Anonymous Coward

        My paranoid conspiracy: Incumbents have to pay exorbitant amounts to get the prices brought down. Otherwise, the prices inflate so the opposition can blame the incumbent.

        • by Mabhatter (126906)

          Well prices went through the roof when Bush was a lame duck and dropped when Obama got into office... Maybe there is something to that? Let's see what happens in September-October....

          Prices are more to do with supply and demand and if refineries are running well prices stay down because we don't have "emergencies". Remember too, CONSUMER usage has been going down, and modern efficient cars are keeping the numbers flatter than in the past when it would go up. Thats why truck fuel (traditionally less than con

      • by DragonTHC (208439)

        it's not paranoid if it's true.

    • Re:Maybe (Score:5, Insightful)

      by tomhath (637240) on Saturday June 23, 2012 @08:38PM (#40425271)
      Demand is low because we're in a world wide recession. They'll go back up when the economy recovers, but that could be a while because we're still coming down off the 90's bubble which knocked everything out of line.
      • by Mabhatter (126906)

        Ideally, fuel efficient cars will keep the peaks down. There for a while we were PHYSICALLY using less gas, not just using less than PROJECTED.

        This is such a silly thing. We all talk about USING less gas, and now we ARE. Rather than tell everybody "good job" we have to keep up with the FUD that we're hurting their profits?

        • Re: (Score:2, Informative)

          by Lord Kano (13027)

          On average, cars were more fuel efficient 30 years ago. The problem is with pollution controls.

          Engines attain maximum efficiency when they run hotter, the problem with hotter running engines is that they produce more nitrogen oxides and cause more smog. So, in the 1980s, they imposed pollution controls to reduce the nitrogen oxides and therefore smog. The only way car makers could meet this was to make engines run cooler, and in so doing reduced the efficiency of the engines.

          Miles per gallon hasn't changed

          • On average, cars were more fuel efficient 30 years ago.

            As a driver for 35yrs, I call bullshit. OTOH if you're american your idea of a 1980's family sedan is probably closer to my idea of a small truck.

          • Re:Maybe (Score:4, Informative)

            by whoever57 (658626) on Saturday June 23, 2012 @10:52PM (#40426085) Journal

            Miles per gallon hasn't changed much in the average family sedan, but 30 years ago the cars were bigger and heavier and used a lot more steel.

            Bigger, yes, heavier, no. Modern cars don't creak like those cars of 30 years ago, because much more steel is used to make a stiffer unibody than in the past. The modern mini, while slightly larger than the original mini is almost twice the weight. My 5-passenger car weighs the same as the 7-passenger minivan that it replaced.

          • by aaarrrgggh (9205)

            Sorry, but have to call bullshit on that one. Looking at diesel standby engine generators, the fuel consumption per MWh for a low-emissions unit over a "standard" unit is about a 9% delta. Comparing an engine from (about) 1970, you would see nominally a 30% higher number.

            1970 - ~90-100gal/MWh
            2012 Tier 2 - 73 gal/MWh
            2012 non-tiered - 65 gal/MWh

            The improved performance is mainly from tighter manufacturing tolerances and higher compression ratios and EFI.

        • We're not using less gas. We have more cars.

        • by Jeremi (14640)

          Ideally, fuel efficient cars will keep the peaks down.

          They'll help, but OTOH every single person in China wants their own car now, and many of them can now afford to buy one as well, traffic and smog be damned. So the likelihood of the world ever seeing a significant gas surplus is small.

      • Re:Maybe (Score:5, Insightful)

        by manu0601 (2221348) on Saturday June 23, 2012 @09:38PM (#40425663)

        Demand is low because we're in a world wide recession. They'll go back up when the economy recovers, but that could be a while because we're still coming down off the 90's bubble which knocked everything out of line.

        But you will have more bubble bursts and more crises. The system is just instable since neoliberal policitians removed all the safeguards that were set up after the 1929 crisis: the, Glass-Steagall Act, an higher income tax for the wealthie...

    • Re:Maybe (Score:5, Interesting)

      by guises (2423402) on Saturday June 23, 2012 @09:15PM (#40425519)
      Supply and demand doesn't apply to oil the same way it does to other products. The OPEC countries decide what the price of oil should be and they adjust how much they pump based on that. The price of oil has been very high in the last few years as a result of the Arab Spring - the Saudis needed tons of money to fend of talk of revolution in their country. If the price of oil is falling then it's because they've decided that is no longer of primary importance. You could guess their reasons: maybe they want to squash all this talk of wind and solar power, maybe they're trying to do something about Syria, etc. It's hard to say for sure.

      The OPEC countries are very careful about maintaining their control over the oil supply and making sure that it isn't subject to typical market forces. One interesting consequence of this, albeit unrelated to the topic at hand, is that the United States has essentially no influence over the price of gas in their country. At least not in the long term - this is interesting, I think, because people talk sometimes about drilling in the nature preserve in Alaska or offshore drilling as a way to reduce gas prices, but doing so would have, at best, a short term effect. The OPEC countries would quickly cut their supply and stabilize the price. Since oil is a global commodity there's really no difference between "foreign oil" and "American oil" unless some major war breaks out that stops international trade.
      • by humphrm (18130)

        OPEC only has so much control, and they're not united in their controls. They don't control demand, which has fluctuated wildly lately. Saudi Arabia, for instance, has been quite reticent in their controls and have been flooding the market as long as it makes them money. The anti-US contingent in OPEC would love to pull back production but the countries that actually make a profit aren't biting.

      • Re: (Score:3, Informative)

        by Papaspud (2562773)
        The OPEC countries can only cut so much, and then they will start going broke. For many, if not most, of these countries this is their only source of revenue. If they don't sell oil, they have no money. If US could get all of it's supplies here in the US, it really doesn't matter how much they cut their own throats trying to raise prices, instead they will start pumping more and bringing down the prices to try and regain market share. They don't have as big of a stranglehold on the worlds market as they onc
      • Re:Maybe (Score:4, Interesting)

        by TubeSteak (669689) on Sunday June 24, 2012 @12:07AM (#40426473) Journal

        If the price of oil is falling then it's because they've decided that is no longer of primary importance. You could guess their reasons: maybe they want to squash all this talk of wind and solar power, maybe they're trying to do something about Syria, etc. It's hard to say for sure.

        Saudi Arabia is pumping like crazy in order to balance the supply disruption from the embargo on Iran.
        They're also pumping a bit more, which is causing the price of oil to go down because the Saudis are oversupplying the market.

        Sooo... no need to guess their reasons.
        It's because the Europeans are trying to squeeze Iran.

  • by Nethead (1563) <joe@nethead.com> on Saturday June 23, 2012 @08:39PM (#40425277) Homepage Journal

    I live on the west coast you inconsiderate bastard!

  • In other words (Score:5, Insightful)

    by godrik (1287354) on Saturday June 23, 2012 @08:44PM (#40425307)

    Experts have no clue what will happen and guess like everybody.

    • by Mashiki (184564)

      Well they sure don't have any clue. I agree with that, but back a few years ago when oil was $80/BBL we were paying around $0.82/L for fuel here in Canada. It's still right up around $1.19 where I live. Of course, now that the provincial government(which is the liberal party) allowed two companies to buyout the majority of the distributors I'm sure you can figure out what's happened.

      • by green1 (322787)

        Price per litre in Canada trended upwards with the price of oil right until about $1.20/L (at about $120/barrel) then the price of oil fell and the price of gas... well... that never really falls. And don't blame the provincial government either, it's the same in all provinces. You can't really blame the federal government either though, because they don't have much of a hand in it. Unless you count their continued refusal to investigate price fixing by the major gas station chains... (Funnily enough, every

    • by Idbar (1034346)
      Indeed. I can read two point extrapolations too: if the slope is negative is going down, if it's positive it goes up, and if it's zero I keep my mouth shut.
  • Saudi Arabia (Score:5, Interesting)

    by ihatewinXP (638000) on Saturday June 23, 2012 @08:47PM (#40425327)

    Saudi Arabia is currently flooding the oil market to drive down prices in an attempt to destabilize the economies and governments of Syria and Iran and weaken their broker Russia.

    More or less anything else that might be conjured up to explain this precipitous drop (aside from a worldwide recession that is driving down consumption and demand) is just nonsense. This is an odd byproduct of economic warfare. My only question is looking for the bottom so I can maximize returns after this economic war turns into a shooting one.

    • by Anonymous Coward on Saturday June 23, 2012 @09:30PM (#40425605)

      Bullshit. Barrack Obama *personally* lowered gas prices though sheer fiat of will. Newt Gingrich was going to do it if he got the Republican nomination, but he lost to Romney. Barack decided to just go ahead and do it since Michelle is busy with her book tour. Note that Mitt Romney doesn't have the power to make gas prices rise and fall--only Barack Obama and Newt Gingrich have this power--Mitt's magic underwear prevents it.

      Newt gets his power from sucking the souls of the babies of the poor. Barack's power source is just sheer awesomeness.

      This "supply and demand" stuff is just a big pile of bullshit, just like science, economics and compassion. That's why the Republicans don't believe in any of it. They just use "common sense".

    • like falling demand due to anemic world economic performance?

      ockham has a razor, you should use it on your crazy man beard some day

    • by samkass (174571)

      One factor you forgot: natural gas. A *lot* of cheap natural gas is coming online right now in the United States, displacing oil in electricity, industry, and home heating needs. Oil's "competition" isn't "no oil", it's natural gas, and it has to get cheaper to compete. Combine that with China's growth slowing, Europe slowly imploding, and certain oil-producing nations needing some cash (I'd put more weight on Venezuela and their election than Saudi Arabia and their interests), and yeah, you get cheap(er

  • Until the week of July 4th. Then they'll drop until Labor Day weekend. Halloween is a good holiday to go for a drive, except for the egg thing.

  • by Kohath (38547) on Saturday June 23, 2012 @08:49PM (#40425337)

    Yeah, gas prices peak in the late spring around Memorial Day. Refineries have less capacity in May as they transition from making home heating oil in the winter to summer gasoline blends. Last winter was one of the mildest on record, so less home heating oil was needed. Also, cheap natural gas and popular migration to warmer areas of the country are leading to less use of home heating oil in the northeast. So refineries were able to stop making home heating oil earlier than normal this year. The gas price spike happened earlier in the year than normal, at a time that coincided with Iranian sabre-rattling about closing down the Persian Gulf. Now, as TFA mentions, weak economic growth worldwide is holding down demand, and prices are dropping.

    Why does anyone listen to stupid news reports predicting future gas prices anyway? You only get on the news by predicting extreme change or extreme hardship. When you say it will be about the same as always, there's (magically) no air time available for that report. This goes for all predictions that masquerade as news. Predictions are not news, and no one know the future. Stop listening to them.

  • Election season (Score:2, Insightful)

    by nurb432 (527695)

    Incumbent qualifies for another term... Need i say more?

  • by couchslug (175151) on Saturday June 23, 2012 @08:54PM (#40425369)

    Demand destruction benefits the US enormously. We now export gasoline and now care about fuel economy.

    Use less fuel, keep more of your money.

  • after which the Saudis stop over-pumping. Before that, however, the "wall of oil" (http://www.safehaven.com/article/24788/saudi-arabia-aims-to-deliver-wall-of-oil-to-us-) promised by the Saudis has brought prices down enough to give a mild boost to the economy which insures Obama's re-election.

    Fundamentally, nothing's changed. The amount of oil in the continental USA and the Gulf are still relatively trivial. We are and always will be dependent of foreign oil to maintain our current standard of living. This

  • Experts Agree: With this trend, by this time next year gas will cost $1.50, and 2 years from now, they'll be paying US $0.50 to take away a gallon of gas!
  • Why the hell won't Obama make an executive order making it illegal to invest speculatively (so basically at all) in gasoline and oil? That would solve half the problem right there. It's a pretty damn direct path from my pocket book at the gas station to some asshole investor's portfolio balance when they buy up a bunch of gas just because they think it will go up and that makes it go up even more. It's a non-congress, simple executive order caliber thing and it really does sound like something that would
    • No that would solve nothing, you have never speculated on anything in your life. Stop talking about things you know nothing about.

      Go find the correlation between Gas price and Gold price. It is steady since the 70s, you'll find pearson's R is above .90. It is all inflation/deflation.

    • by jamstar7 (694492)

      Why the hell won't Obama make an executive order making it illegal to invest speculatively (so basically at all) in gasoline and oil?

      Because the instant he did it, he'd be hauled into court for 'overstepping his authority' and rightly so. There's a reason why the federal government was meant to be relatively weak, it was to keep the tyranny of the minority to a minimum and stop the various states from exporting their various stupidities nationwide.

      Course, ol' Honest Abe said 'We'll see about that, now, wo

      • by codepunk (167897)

        "Because the instant he did it, he'd be hauled into court for 'overstepping his authority' and rightly so"

        That does not seem to be slowing him or his administration so far.

    • by amorsen (7485)

      Speculation is what allows to deal with problems before they get REALLY bad. Would you have preferred gas prices to stay at $30 until the moment where demand can't be met, with a sudden jump to $200? Complete with a drop straight back when the Western economy collapses because people can't afford to drive to work?

      Speculators make sure that we know of the problem while we still have some leverage to fix it. Improvements in energy efficiency get profitable earlier, and as long as a price hike is only specula

  • I wonder... (Score:5, Insightful)

    by Anonymous Coward on Saturday June 23, 2012 @09:23PM (#40425567)
    Will those people who put signs up at gas pumps blaming Obama for rising gas prices put up signs giving him credit for the drop in prices?
    Because the US President clearly has a whole hell of a lot of control over the price of a global commodity.
  • No matter who wins, the day after election day it will go right back up again and then some.

  • Cheapest in my area (central coast California) is $3.85/gl and the California state average is $3.83/gl. Trending down, but still much higher than national average.

    Overall, sustained higher prices will benefit the US in the long term. It's putting upward pressure on fuel economy so we're finally making progress catching up with the rest of the world. We have a long way to go still but it's improving. Electric cars are just starting to become viable for the American worker's commute, now price just needs to

  • Charts (Score:4, Informative)

    by Ronin441 (89631) on Saturday June 23, 2012 @09:48PM (#40425733) Homepage

    And here I expected a story about changes in the price of something over time would include a chart.

    To remedy the lack of charts: http://www.consumerenergyreport.com/2012/02/27/how-high-have-gas-prices-risen-over-the-years/ [consumerenergyreport.com]

    (This is a good link because it includes an inflation-adjusted chart.)

  • "Experts" (Score:5, Insightful)

    by tyme (6621) on Saturday June 23, 2012 @10:13PM (#40425857) Homepage Journal

    Experts who claim that prices will continue to rise when prices have been rising, or continue to fall when prices have been falling, are nothing but weather vanes. These are the same idiots who have denied that we were in the last half dozen bubbles; the same idiots who were excited about DOW 30,000; the same idiots who claimed that stock/housing prices could just keep going up and up FOREVER!

  • by dbIII (701233) on Saturday June 23, 2012 @10:14PM (#40425863)
    Peak demand happened in 2008, so supply actually exceeds demand sometimes. Technically peak production happened then as well, but so many people bring their own unrelated baggage to "peak oil" when it's just the maximum point on the production graph. In this case the decline has happened because people we unwilling to buy more oil, for mostly economic reasons, and to a much lesser extend which is only really kicking in now, because other sources of energy become increasingly popular the longer the oil price is high.
    Personally I'm hoping for a very slow slide down the oil production graph instead of a sudden drop to nothing which is what some people think of with "peak oil". Before people start arguing about irrelevant stuff, you should note that's liquid oil, the easy to get stuff, not the more expensive per Joule stuff like oil from tar sands, shale, made from coal or whatever. That stuff will be our liquid fuel of choice only when mineral oil is scarce enough to be very expensive to obtain.
    • by Ronin441 (89631)

      I'm hoping for a very slow slide down the oil production graph instead of a sudden drop to nothing

      Typically production of a limited resource is approximately symmetric, so you can expect production of oil to tail off over about the same time period that it ramped up. There's no point at which we "finish" the "last" of it, but expect us to be mostly done with oil dug up out of the ground somewhere in the 22nd century.

      https://en.wikipedia.org/wiki/Peak_oil [wikipedia.org]

      https://en.wikipedia.org/wiki/Hubbert_peak_theory [wikipedia.org]

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