It's been a few months since oil and gas has been much of an issue. Both prices fell, and gas was below $1.50 a gallon in many places (not in our area - not even close). Then gas prices creeped back up to the $2.00 mark, fell back, and surged ahead.
In the Tucson area, gas is still available in the low $1.80s and you can find it for over $2.50 a gallon in some markets.
When gas was bordering on the $2.00 mark it would go up a couple of pennies and then fall the same amount. or more I witnessed a 10 cent increase one day and a 10 cent decrease the next. This kind of market response is tricky if you buy on the day it goes up, but it's relatively stable. You know that market forces will prevail and gas prices will remain basically the same over time - rising or dropping a little.
Now, with no big runup in oil procing - but with the Memorial Day weekend just over the ridge, gas prices are really taking off. Oil actually fell back over a dollar today from its midday high and closed under $59 a barrel.
How can gas increse over 20 cents in one day? Where was the market force that caused this? Guess I missed it, but I long for the day in a couple of weeks when that price drops by a quarter in the same day.
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I always wonder how it can jump double digits in one day too. Gas is about $2.39 a gallon here. Until you go to the more suburban areas and then it is about $2.69.
I was thinking the same thing today Steve. We usually have cheaper gas in NJ VS other areas, now I am seeing EVERYONE above $2/gal. Even the cheapo stations are well into the 2's. Just in time for summer driving season.
Big increase considering a few weeks ago we were in the 1.70's
I can't believe I found your post, spot on. It seems like I just woke up today and gas is now at $2.39/gallon! What did I miss. Seems like just yesterday it was $1.89. I DON'T UNDERSTAND.
Gas prices are surely trying to sneak back up on us....hating it although I did switch to a 4 cylinder.
20-30 cents in a hike is very normal in my area. then it will decrease 2-5 cents once or twice a day until it is back down to or close to the former price!
Gas earlier this week was around $1.91/gallon, next day it was 2.05 - thought I would be 'smart' and wait a day or two for it to fall. Now it is $2.40+ *slap face*
WE had a jump this week of about 27 cents... It all greedy pricing from the guys at the top of the gas/ oil train if you ask me...
And July 4th is right around the corner so get ready for that hike...perhaps putting us at the $70 per barrel mark and $3.50 per gallon.
Is there anyone who thinks that fuel won't be $6.00 per gallon in a better economy?
Hurry Chevrolet...get the "Chevy Volt" into fast production...but then electricity will go up in cost, won't it?
Here in northern Michigan we have $2.34 a gallon.... not good. Needs to come down or we will face another non-tourist season. After last year, we can't afford that to happen. We have seen quite a bit of excitement and buyers have come forward in the last 60 days. They will certainly back off if gas prices rise much more.
Steve, gas isn't suposed to follow oil directly, since gasoline is a commodity too, and should be based upon production and stores of gasoline; but it always follows oil on the upside, yet fails to follow it down. Must be magic : )
Steve,
Wow, if you have gas at under two bucks a gallon, ever anymore, I am jealous.
Steve - I noticed a 10 cent a gallon price increase overnight on Mother's Day. However, our prices are quite a bit more than your $1.80. We seem to be averaging about $2.45 a gallon.
In addition to the Memorial Day weekend coming up the other thing that effects gas prices in the spring is all the special formulations that are required by our government to keep pollution down during the summer. Because we lack the refining capacity to handle normal demand and the production of all these special formulations supply becomes restricted until about mid-summer. Welcome to our government's lack of a clear energy policy.
Hi Steve
Oil use is at five year low, and the price of oil is going up, very interesting.
Good luck and success
Lou Ludwig
Steve: I hear that prices will be up at $4/gallon again within a year. Makes me sick to think about.
I've never seen the 20 cent increases but I see the 10 cent swings all the time.
Debi,
It clearly doesn't respond to normal market forces. That's what so bothersome about it. :)
Steve
Robert,
We didn't ever see gas all that low, but anything below $2.00 is now considered good. See how we have been conditioned? :)
Steve
Scott,
Get in line. It's very hard to understand. When many things begin to increase in price we can buy ahead - not so with gas. :)
Steve
Mike and Cindy,
When we have to shift our behavior because of their pricing something is wrong. :)
Steve
Vern,
We see the big run-up but never the downturn more than just a few cents. :)
Steve
Ethan,
You were treating gas like it had a normal pricing policy - which it doesn't. :)
Steve
Diane,
This one lies squarely in Congress' lap - for excessive regulation, demading way too many grades (more than one is too many), and essentially denying competition. :)
Steve
Michael,
I wouldn't wait for Chevy to do anything - except maybe disappear. :)
Steve
Lynda,
That price seems about average - don't see how it could dampen tourism - unless it dramtically increases. :)
Steve
Steve,
It's not me - it's the folks in Arizona and some of the other areas that traditionally are lower. :)
Steve
Myrl,
Our gas is in the $2.25-2.29, pretty much around the state. That $1,80 is in Arizona. :)
Steve
John,
I've definitely noticed that, too, but comodities can have production increased, more refining, more distribution, more warehousing, and other such asctions to keep the price in check. We need more players. It's that simple. :)
Steve
Kathy,
You said the magic word - governemnt. This is why prices are so sporadic and unstable. Too much regulation and intolerance for a solution. :)
Steve
Lou,
That's the thing about commodities - it's easy to manipulate the market. :)
Steve
Chris Ann,
I hadn't heard that. If it is, there isn't a sitting member of Congress that doesn't come out against the regulation or lead the charge for domesric drilling who should be allowed to retain their seat. :)
Steve
Justin,
Anything more than a few cents cannot be attributed to anything but market manipulation at some level. :)
Steve
Steve - I don't know much about the hows and whys of the pricing of gasoline. I do know that the high price of oil, natural gas, and refined gasoline in 2008 resulted in unprecedented interest in oil and gas reserves - previously though uneconomical to extract commercially - in Missouri. In Missouri, you can either permit specific wells or seek a spacing plan. I was appointed a hearing officer by the Missouri Oil and Gas Council to conduct a public hearing on a spacing plan in southeast Missouri covering 4-5 counties. It was the first such application in 50 years. It is amazing how technology impacts this industry and opens up possible new sources of oil and gas.
Ryan,
That sounds like good news. Does this mean that we might get some new players or more drilling? :)
Steve
All I know is that oil and natural gas production here in Wyoming has been slashed by the low price of oil. Rig counts are down, layoffs are everywhere. Another typical boom/bust cycle in play. I suppose when the Saudis and OPEC manage to cut their production, we'll see some price increases and get production back in gear.
Tim,
Interesting perspective, but we need to have a "Walmart" approach to energy in this country where competition drives the price of oil, exploration, mining, refining, and distribution down to the lowest possible levels. :)
Steve
Steve - Right now, it doesn't like there will be a substantial increase in drilling. To be commercially feasible, oil and natural gas price would need to rise above current levels. I just found it interesting because new technology allows for new reserves.
Ryan,
I agree, but I find a more compelling reason for no drilling - the government and the environmentalists don't want it. We really need competition. That's what will drive down the prices - but that won't can't happen either. :)
Steve
Steve.. Thank you for posting this. I was going to blog about the same thing. It blows mine mind how gas here in Cromwell, CT went up .30 cents in less than 5 days. It went from $2.05 to $2.37... oh the joy of summer and holidays.
Valerie,
How can it be normal supply and demand when it's done routinely and in such jumps? :)
Steve
Steve,
The jump is not supply & demand, it's the same speculators that drove the prices up in the past. Yes it is interesting how the oil companies raise their price at a higher percentage than the rate per barrel of crude.
William,
And we continue to allow them to get away with this. Gas is not a commodity. It is a product, It should respond to market forces but it is insulated. :)
Steve