Cheaper gas in the USA?

[oldtiffie]

http://www.nytimes.com/2012/04/11/bu...sinessspecial2

[flylo]

oldtiffe, How much is fuel in OZ?

[lakeside53]

Natural gas - yes... but gasoline? Another myth that we would benefit locally by drilling more. Oil prices are set by world demand - it goes to the highest bidder. Some smallish advantage in lower transporation cost, sometimes. If we supply a little more, our mid-east friends will supply a little less.

[wierdscience]

Natural gas - yes... but gasoline? Another myth that we would benefit locally by drilling more. Oil prices are set by world demand - it goes to the highest bidder. Some smallish advantage in lower transporation cost, sometimes. If we supply a little more, our mid-east friends will supply a little less.

Tax exports,demand speculators take delivery and here's the big one bring the value of the Dollar back out of the gutter and we will see lower prices at the pump.

Also increasing supply will have a positive impact on speculation since speculation is driven by supply.

I could be wrong,but the same people who are now proponents of the fallacy that increasing production won't lower prices are the same ones who a few years ago said America's oil patch was a dry hole.

[oldtiffie]

oldtiffe, How much is fuel in OZ?

Gasolens (USA) - petrol here - is near enough to US$1.50 per litre x 3.785 = US$5.68 per US gallon.

It is much higher in our remote areas but more expensive still in UK and Europe etc.

[Evan]

Another myth that we would benefit locally by drilling more. Oil prices are set by world demand - it goes to the highest bidder.

It doesn't even need to be available for bidding. The refiners set the raw product cost as if they bought it on the world market regardless of what they actually pay for it. It is standard profit maximization practice.

There are a lot of misconceptions floating around right now about the US and the oil market. Prices in the US are artificially depressed because of a glut of oil at Cushing, OK. That is cause by lack of storage capacity and pipeline capacity out of Cushing to the south coast. The US West Texas Intermediate (WTI) price is set in Cushing and it is resulting in a total disconnect between world prices and US prices. US prices have been running as much as $30 per barrel lower than Brent barrels causing severe distortions in US prices. That will end soon.

There is also a current misconception that the US is swimming in new reserves from discoveries in the Bakken and Eagle Ford formations. There are some significant light oil finds there and they sound like a lot. There is a LOT of bad reporting regarding how much oil is actually recoverable vs how much will stay right where it is. The recoverable amount is in the range of 4 to 12 billion barrels. Sound like a lot but that is enough to supply the US for around 150 to 600 days. It's a drop in the bucket in US oil demand and the US still imports 49% of it's oil with 25% of that from Canada. Canada is by far the largest external supplier to the US.

The US has the lowest taxes of all the 1st world countries. A realistic price for a gallon of gas in the US would be around $5 to $8. Gas here is near $5 per US gallon right now and Canada is one of the lowest taxed countries too.

There is nothing in the future that is going to save the US from much higher oil prices and gasoline prices. It can be put off for a short while but no more than a couple of years at most and even that isn't likely.

[danlb]

The prices in the US depend on where you live.

SF bay area ( within 30 miles of several refineries) its' 4.39 per US gallon for regular today.

Dan

[lakeside53]

Also increasing supply will have a positive impact on speculation since speculation is driven by supply.

I don't know the number but we have significantly increased domestic supply over the past decade or two. That didn't have any dampening effect on long term pricing or help the dollar.

The Saudis can vary production far more then we can make it up. It's in their interest to keep the price higher and pump less.

[.RC.]

A lot of people forget when they compare fuel prices is tax makes up a hell of a lot of the price....

I often wonder why especially in this country with HUGE reserves of natural gas why there is not research into converting transportation into LNG based rather then oil based...

[Jaakko Fagerlund]

High prices? 1.80 EUR per litre here for 98 octane fuel, so about 8.95 USD per gallon. And yes, it has been like this for about half a year. Of this sum tax is about 60 %.

[aboard_epsilon]

what makes it high in the UK is that the government put a wapping 64 percent tax on it .

all the best.mmarkj

[fjk]

I often wonder why especially in this country with HUGE reserves of natural gas why there is not research into converting transportation into LNG based rather then oil based...

Fleets are converting. They can have their own fuel supply points.
For individuals, it's harder since we have to go to retail filling stations
and they won't convert until there is demand (and demand won't arrive
until there is availability...)

It might be more practical to figure out how to turn natural gas into a
liquid fuel that can be supplied by existing infrastructure

Frank

[J Tiers]

Apparently the US is a net EXPORTER of gasoline, for various market and distribution reasons.....

Despite the "drill baby drill" political idiots squealing that if we drilled more we'd have cheaper gasoline, the apparent oversupply of gasoline in the US has not caused a severe drop.

it DOES likely help keep prices from getting really ridiculous. if we only had 75% of our basic minimum requirements available, prices would indeed "rocket up" to levels you would not believe.

And, for those counting on cheap natural gas..... available only due to "fracking" etc, that likely won't last..... the consequences will probably force it to be largely abandoned within a few years, with the result that natural gas prices might be double or more what they used to be. So much is being converted to natural gas that the demand is hugely up. And new requirements that electric power plants be fueled by gas won't help.

[Ian B]

RC,

Convert vehicles to run on gas? It's common in Holland, I had an Opel Record running on both petrol and LPG about 30 years ago.

You can also approach the problem the other way around, and make diesel from gas:

http://www.shell.com/home/content/ab...jects_2/pearl/

Ian

[sasquatch]

Just heard a radio phone in this morning concerning the spiking gas prices here in Ontario, lowest in the southern heavily populated areas is running $1.34 per liter , Up in the northern/central areas it's as high as $1.47-$1.49 per liter. That works out to around $6.75 per Imperial gallon.

The government enjoys this as the federal bunch collects about 30% per liter cost, then the provincial bunch grabs about 12% per liter cost.