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Rising Gasoline Prices: 3 More Things To Know

Today’s Energy Update
(Because Energy Fuels Our Lives)

 

After the price for gasoline at the pump had risen over much of the first month of this year, I published a piece in late January detailing seven key factors that go into determining what those prices will be in the United States. Given that gas prices have gone up again in the past two weeks after the first half of February was relatively stable, now is a good time to discuss the reasons why that has taken place.

There are three main reasons for this recent uptick of 13-15 cents per gallon across the country, as follows:

The deteriorating situation in Venezuela – That late January piece in part had this to say about the possible impact on U.S. gas prices due to the looming collapse of the Maduro regime: “Venezuela has been a fairly significant exporter to the U.S. but its volumes have steadily fallen in recent years as its economy has collapsed. U.S. refiners will have to find another source of crude to replace the lost Venezuelan volumes, and to the extent they must pay higher prices to obtain that feedstock, the higher costs will be passed through to the consumer.” This appears to have impacted gas prices to some extent, although no one really seems to have a good handle on how much of the recent price climb is attributable to Venezuela.

Routine refinery maintenance season has begun. – Late February is typically the time of year when many refiners begin taking their facilities temporarily offline for routine maintenance purposes. Refineries are very complex facilities with a high number of moving parts that operate under high temperatures and pressures, in good weather and bad. All of these factors and more require require that the facilities be shut down for a few weeks once or twice each year for routine maintenance.

 

Read the Rest Here

 

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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Trump Tweets, OPEC Blinks

The Evening Campaign Update

(Because The Campaign Never Ends)

Tired of all this Winning yet? – If you’ve been irritated by how much it’s cost you lately to fill your car with gasoline, well, cheer up.  President Trump is on the case.

In fact, if you believe the folks at Bloomberg, he’s already caused the Saudis to blink and start working to get up to another 800,000 barrels of oil per day onto the global market in an effort to stabilize the price for crude oil at current or slightly lower levels.  Given that crude is the raw material from which gasoline is refined, a halt to the rapid rise in that commodity’s prices that has taken place in the last year will also stop the rise of the price at the pump.  Crude prices dropped more than $3.00/barrel (roughly 5%) on Friday in response to the Saudi/OPEC announcement of their intention.

So, how did President Trump accomplish all of this?  Optically at least, he did it with a single tweet.  On April 20, the POTUS took to his famous Twitter feed to slam OPEC for the rapidly rising price of gasoline as Americans headed into the summer driving season:

As Bloomberg reports, the Trump tweet produced an immediate reaction among the various OPEC ministers:

OPEC officials were in a meeting at the opulent Ritz-Carlton hotel in Jeddah on Saudi Arabia’s Red Sea coast when Trump tweeted his views and they immediately saw it as a significant intervention.

“We were in the meeting in Jeddah, when we read the tweet,” OPEC Secretary General Mohammad Barkindo said on Friday. “I think I was prodded by his excellency Khalid Al-Falih that probably there was a need for us to respond,” he said. “We in OPEC always pride ourselves as friends of the United States.”

Given that, unlike his immediate four predecessors in office, President Trump does not hesitate to lever negotiations over seemingly unrelated matters into one another, using all of the influence of the United States to obtain positive results, these OPEC countries also have developed a new-found sense of respect – likely bordering on fear – for expressions of concern coming from the U.S., even when they come from a Presidential tweet.  Perhaps even especially when they come from a Presidential tweet, come to think of it.

Now, probably there was more to this new attitude suddenly being expressed by OPEC countries.  The Bloomberg story cites a recent congressional hearing covering proposed legislation that would attempt to make OPEC and other commodity cartels subject to the U.S. Sherman Anti-Trust Act, and there have likely been negotiations between U.S. and officials from Saudi Arabia and other OPEC nations taking place behind the scenes since April 20.   But there is no doubt at all the President’s tweet got this ball rolling.

So, when you next go to fill up your car and notice that the price of unleaded has dropped a dime a gallon in response to Friday’s 5% drop in the price for crude oil, you know who to thank.

Isn’t it nice to have a President who’s looking out for our interests instead of the interests of some nebulous “international community?”

That is all.

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Here’s Why Gas Prices go up Every Year at This Time

If you’re wondering why gas prices go up a this time of year, I explain it all with host Julie Rose on @BYUradio here.

Every year at this time, gas prices seem to go up. Or maybe it’s just that we notice it a bit more, because we’re making vacation plans? You’re not imagining things: the price for regular unleaded gas is at its highest level in three years. Americans are paying an average of $2.74 per gallon of regular unleaded right now, which is 30-cents higher than it was at the start of the year.

https://www.byuradio.org/episode/bd967e47-688e-456e-a4df-b34a80821876?playhead=62&autoplay=true

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