Gas prices surge past $2.50 mark overnight
UCAN News
UCAN's Gas Project at www.fueltracker.com is showing an average price of $2.53 a gallon for regular unleaded in San Diego this morning.
That's an overnight increase of 3.6 cents, and an increase of more than a dime a gallon in the last week.
The new average is an all-time record high for 2009, and reflects a market that is completely out of sync with market fundamentals.
At the beginning of the year, gasoline bottomed at $1.84 a gallon, with NYMEX oil selling at $44 a barrel. As oil prices have climbed, gas prices have climbed, too, but oil prices increase are largely the result of speculators driving up the price. According to the Department of Energy, demand for oil is down with inventories of stored oil at a 20-year high.
In 2008, when oil reached $147 a barrel, almost all of the increase was due to rampant speculation. Oil traders purchased contracts and held the oil for ransom. The fact that oil prices have climbed the last few weeks while demand has plunged suggests that we are seeing the effects of speculation, not supply and demand.
On this day last year, gasoline averaged $3.95 a gallon. Oil cost $124 a barrel, representing 2/3 of the cost of a gallon of gasoline.
Today, San Diego gas averages $2.53 a gallon and oil costs $57 a barrel, representing about 50% of the cost of a gallon of gasoline.
To put this another way, since January 1, gas prices have increased by almost 70 cents a gallon. Meanwhile, the per gallon price of oil has increased only 30 cents a gallon.
Gas & Autos Gas Prices -
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I'm forever seeing
I'm forever seeing percentages and values for fluctuations in gas and oil prices, but I don't think it really tells the story of what's happening. Now, I'm no expert in either field, but I do believe California leads the nation with $0.639 cost per gallon at the pump on gasoline. It's different for diesel and I wonder why other uses of oil, e.g. plastics, don't get trampled with taxes as well. But we get off topic! When we take the fixed cost out of all the equations the fluctuation in price changes is dramatically increased.
http://www.edtrialpack.com/
Let's Deal Only with the Variables
I'm forever seeing percentages and values for fluctuations in gas and oil prices, but I don't think it really tells the story of what's happening. Now, I'm no expert in either field, but I do believe California leads the nation with $0.639 cost per gallon at the pump on gasoline. It's different for diesel and I wonder why other uses of oil, e.g. plastics, don't get trampled with taxes as well. But we get off topic! When we take the fixed cost out of all the equations the fluctuation in price changes is dramatically increased.
Taking $0.639 away from 2.53 gives us a price of $1.891. Let's just say $1.89. Anyhow, I'm not going to evaluate all this, but if Gasoline is just 40% of a 40 gallon barrel of crude it does work to a $57 barrel, give or take. But what is the answer with 1.89?
And while we're at it, is the consumption of other uses of crude also down. What are their prices doing? If inventory is being withheld it's withheld for all. or is it? Maybe the refining processes can be tweaked to alter the output in different categories per barrel and they have better deal. Since they're not in the public eye as gasoline is it may be a pure business arrangement, or they could be getting clobbered even harder. Any details?
Payday Loan
In 2008, when oil reached $147 a barrel, almost all of the increase was due to rampant speculation. Oil traders purchased contracts and held the oil for ransom. The fact that oil prices have climbed the last few weeks while demand has plunged suggests that we are seeing the effects of speculation, not supply and demand. Payday loan lenders had a lot of anecdotal horror stories from some person that no one has ever heard a legion. Come to think of it, there is nothing horrible about a payday loan. A payday loan is a small loan that you pay back quickly, usually the next payday. Usually $15 to $30 per $100 loaned is paid for fee for the financing. A payday loan is a great help when we are in a financial urgency. Let say you had a sudden expense and missed your utility bills and are facing utility disconnection, but your payday is still away. That is where they come in handy, and if you pay it back on payday, a payday loan won't build interest like a credit card.
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