$2.99 a gallon! Now just $1.99 !

Kinda makes you want to bury a big tank & fill it up about April!

Somehow I don't think the city zoning board would go for it though . . .

GlassSeeker wrote: Wonder what is pushing the price down?...Obama?

Election time??? That or their trying to bankrupt the Russians

Talked to an oil company bigwig and the price should be under $1.90. Mainly the U.S. policy to not drill on public lands allows other countries to jack the price.

But hey, we've got to stop this global climate change...

boardersdad wrote: Talked to an oil company bigwig and the price should be under $1.90. Mainly the U.S. policy to not drill on public lands allows other countries to jack the price. But hey, we've got to stop this global climate change...

There is no such policy - outside of a few wild life preserve areas - there is plenty of drilling on public lands in the US.

Maybe no formal policy but...

http://www.reuters.com/article/2014/04/22/kemp-usa-oildrilling-idUSL6N0NE33K20140422

Kind of like there is no formal policy against running pipelines down from Canada, but....

This thread made me curious about drilling on public lands, and being unsatisfied with a Reuters column as the basis of my information, I hunted around online a bit to see what the consensus was on this topic.

It seems that there is some merit to the fact the drilling on public lands has remained stable, or even fallen, and that the increase in oil/NG production in the US is mostly due to increased extraction from private land. However, according to a 2013 report* by the (super cool! your tax dollars at work) Congressional Research Service, this is mostly due to a fall in offshore drilling (following Deepwater Horizon, remember that?) since 2010. Over the period 2007-12 there was actually a 15% increase in oil production on Federal land. Over the same time period there was around a 35% increase in oil production on private land.


From CRS report mentioned above.

Let's assume gas is selling at the pump for $3.00/gallon. In inflation adjusted dollars circa 2000 (the year I started driving) that is $2.17. The average price of a gallon of gasoline in the US during the year 2000 was $1.53, so gas is about 40% more expensive today than it was 14 years ago.

Remember; energy markets, like nearly everything these days, are global. US oil production has increased about 20% from 2000-12 (from about 5 million barrels per day to over 6 million barrels per day). Meanwhile, over the same period US gas consumption has only risen about 4%, so clearly domestic oil production and the price of gas at the US pump are not at all directly related. Considering the massive increase in global energy demand (China, India, Africa anybody?) I'd say a 40% increase doesn't seem so bad.

Basically, gas is pretty frickin' cheap. It is ironic that in a thread celebrating the current low prices, folks are still complaining about how they wish it was even cheaper. I lived in Iceland for over a year between 2008-2012. I don't recall a time when gas was cheaper than $8.00/gal, and more often it was closer to $10.00/gal. If you think those folks don't like to/have to drive as much as we do you are wrong. There are many small cars in Iceland, but plenty of SUVs (many lifted/large tires for off-road use).

As we've all taken note in the "Angry" thread, be happy it is cheap at the moment because nothing is forever.

*For those that are interested I highly recommend reading this entire document (it is rather short).

I used the Iceland example only because they have very expensive gas but they still have a lifestyle not that dissimilar from us (though I never did see a ski boat). I don't know for sure, but I think you are correct that there are no Icelandic refineries and that all fuel has to be imported. I haven't traveled outside of the West, but most of the places I've been in W. Europe had gas prices that were somewhere between ours and Iceland's, and I would attribute that to a variety of factors, including very high taxes.


Price per barrel of crude oil over time adjusted for inflation

Adjusted for inflation, the current price per barrel is about twice as expensive now as it was in 2000, so if gas were about $1.50 then it should be around $3.00 now. Hmmm... Seems about right. Of course prices are usually more like $3.50-4.00, but even so the price per barrel and the "pain at the pump" appear to me to track more closely than I would have expected. I was actually surprised to see this because in general I agree with your sentiment that they seem to be more decoupled, but I had never honestly looked at the data.

As consumers we've also become habituated to high prices, so I'd guess that is part of the reason why things do not scale 1:1 between the price of crude and the price of gas. Also, there are production lags and a host of other factors to consider. In general, I would expect companies to make more profit the higher the price goes because at the low end they have numerous fixed costs that do not scale linearly as the price increases (this is the reason that McDonald's can sell you twice as much food for 150% of the price and still make a greater profit), so this probably explains in part why Exxon and other oil companies are making record profits.

As I noted previously, and as any market-minded individual knows, fuel is a global market. If demand outstrips production the price will go up. Who cares how much we are pumping compared to other nations, or even how much we have pumped compared to the past? Everything relates to how much folks are willing to pay, here and abroad. If/when the European and Chinese economies get back on their feet (something akin to activity prior to 2008) I don't think $5/gal would be too far off. So again, enjoy it while it lasts.

It must be getting chilly since these threads are warming up again... (that goes as much for myself as anybody else).

How much does Iceland tax gas?

Iceland taxes gas at ~50%.

In the US taxes average (fed+state+local) about 50 cents, so currently ~17%.

To tax gas or not to tax gas is pretty much a separate argument, someone is going to pay for government somehow, I would rather pay 4 dollars a gallon with 2.50 going to taxes and 1.50 going to oil companies and refineries than pay 3 bucks a gallon with .50 going to taxes 1.50 going to oil companies and refineries and 1.00 going to speculators. But that's just me, being in the middle class I know I am going to pay all the taxes for the country either way so whether they are on my gas, or my income, or my property it is all the same to me.

My Iceland example was only to illustrate that gas is relatively cheap here, not on why the price varies from place to place. That is somewhat of a separate issue.

Incidentally, gas is selling for $2.97 here in Lexington this afternoon.

i paid 355 near thw highway but saw 309 in the middle of the city.. hhmm i wonder if they prey on travelers

The bond market is rallying driving interest rates down because the guys with money know we are still not out of the woods and won't be for some time...5+ more years they are betting. Cheap gas sure would help an ailing economy

Funny because here Shell is pretty competitive. Luckily Orange County (Orlando) has cheapest gas in all of Florida. Something I never understood is on one corner gas can be say $3, on the corner next to it $3.25 and yet the more expensive one will have just as many customers.

I was curious as to why gas prices are falling, so I did some quick searches to get a feel for some key drivers.

- Boom in production in US, and other global producers still pumping it out in large qtys. Resulting in global glut of oil.

- Slowing global economy decreases demand.

I have been noticing that when I fill up, it has taken as much as around $70 to fill it completely it. Now it takes around $55 or so.

The money people are no longer paying for high gas prices will also have a stimulative effect on the economy.