December 17, 2010 12:01:00 PM
Odds are that Santa''s going to bring us an unwelcome present this Christmas: $3 a gallon gas.
Thursday in Columbus, prices were ranging from $2.81 to $2.99 for a gallon of regular gas, according to gasbuddy.com. There''s no guarantee prices will top $3 by Christmas Day, but no one is predicting prices will plummet during the busy travel holiday, either.
Nationally, the average price per gallon was $2.98 per gallon this week.
The average price was $2.34 a gallon in 2009. Only a year and a half ago, we were wondering if the seemingly-insane high price of $2 a gallon was here to stay. Now, we get nostalgic for that price. (Can you imagine the run on a station that offered gas for less than $2 a gallon today?)
Gas prices rise along with demand, distribution costs, and of course, the profits the oil companies pay themselves. The worldwide demand is driven -- pun intended -- largely by drivers in the U.S., including you and me.
Of course, our love for gas-guzzling cars and trucks doesn''t help. Our roadways are clogged with Suburbans and Tahoes and F-150s. As long as we''re determined to drive more car than we actually need, gas prices will continue to climb.
That said, the climb is inevitable -- the question is how high, how fast. There''s only so much oil in the ground, and we''re using it up. More people around the world, including in rapidly growing countries China and India, have taken up driving.
How high does a gallon of has have to go before we drive less or trade to a smaller car, affecting demand and slowing the tide of higher prices?
Maybe we''ve already hit that mark, at least locally. An informal poll on cdispatch.com a few months ago showed that the vast majority of people have already changed their driving habits, or would do so when prices hit $3 a gallon. (This poll was done back in the good ol'' days, when gas was around $2.70 a gallon.)
Global forces are at play here, and we''re paying for it at the pump. All we can do is our own part. Drive less. Drive a more efficient car.
We''re going to try to be good, because we''d rather have a lump of coal in our stocking than a $3 gallon of gas.
frank commented at 12/17/2010 2:30:00 PM:
Ya think maybe we can drill a few wells down in the Gulf of Mexico at some point ever again? This administration's energy policy is killing the economic recovery.
hope commented at 12/17/2010 9:52:00 PM:
It's Opec and the oil companies and the traders. To think anything else is ludricous.
frank commented at 12/18/2010 10:11:00 PM:
Never would I think that killing domestic production would give OPEC more pricing power. How dare me. It must be them evil rich folks again.
hope commented at 12/19/2010 9:35:00 AM:
@frank:OPEC is supply and demand, all in one. Over a year ago, when oil was nudging below 40 bucks a barrel, OPEC has a meeting and decides to take several million gallons of oil off the market. If our domestic drillers put an extra million barrels of oil on the market monday, Opec could take it away by taking the same amount off the market on Tuesday. I might add that Opec has not put the amount of oil back on the market that they took off over a year ago.
jls commented at 12/19/2010 10:26:00 AM:
I certainly don't pretend to know all the factors that go into the price of a barrel of oil, but I don't just robotically blame the oil companies. As Hope pointed out, OPEC continues to manipulate the price by withholding supply; just recently, oil ministers of some OPEC countries were quoted as saying they were comfortable with $70 oil, and they were afraid that pushing the price higher would wipe out any vestiges of a worldwide economic recovery. Well, OPEC, it's time to put your actions where your mouths are!!! They need to increase the supply, and do it NOW!
Of course, any measure to increase the oil supply would just be a "stop-gap" measure. Demand in China and India is surging, and will outstrip supply in 5 to 10 years. Watch out, because $4 gas is coming agin, probably sooner than any of us could imagine. We REALLY need to get behind alternative energy (and no, ethanol is NOT acceptable). Hydrogen, biodiesel, LPG, electric, and so forth, are going to be our salvation and we must put a huge effort into developing the infrastructure NOW.
frank commented at 12/19/2010 8:04:00 PM:
Hopeless just for kicks try to think a little deeper. If OPEC takes a million/day barrels off the market because our domestic production increases by the same amount, that is $90,000,000.00/day that STAYS in the USA and doesn't go to the middle east. That puts pricing pressure on them.
Yes, they have power but they are not the world's only supplier. I know from experience you don't grasp business concepts very well, but try to think of it as wholesale supplier selling widgets to retail stores. Supplier A might control 40% of the widget market but he will respond to the pressure if supplier B, C, and D start taking market share away from him. If he cuts production to keep the price up, he does it to the detriment of his bottom line since he is selling fewer widgets. His best compromise is to balance production and price to minimize his revenue loss.
OPEC supplies 40% of the world's oil and like the example above, they will respond to market pressures. This is why it is extremely important that we bring our oil exploration and production back on line. Obummer's moratorium on offshore drilling IS hurting the country and is one of the factors driving up oil prices. It isn't rocket science, just everyday capitalism.
hope commented at 12/19/2010 9:36:00 PM:
@frank---The comment I made was concerning your pricing power, not keeping the money in the USA. The last comment that you made brings the oil companies into focus. Opec is doing them a favor also by keeping prices artificially high. Why should they drill for more oil when they know opec is on their side.
Opec and the oil companies have us over a barrel. (LITERALLY)
frank commented at 12/20/2010 12:14:00 AM:
Hopeless what would happen if we stopped all US production? Would the price we pay for oil stay the same?
hope commented at 12/20/2010 7:34:00 AM:
How 'bout if we nationalize them and give all the profit to the the people who burn the gas as the Tribes' do the casinos they operate. It would be called people power.
frank commented at 12/20/2010 8:59:00 AM:
"Nationalize"? "It would be called people power."
No, that is called COMMUNISM. Now we see your true colors.
FWIW: You can share in the oil company profits now. Most of them are publicly traded and are in fact owned by the public. Buy some stock or corporate bonds. That is the AMERICAN way.
hope commented at 12/20/2010 8:48:00 PM:
Now you see America's true colors. Trade with communist China, who is eating our lunch.
hope commented at 12/22/2010 8:08:00 AM:
Every day that the sun comes up, our standard of living drops because of Opec,the oil companies, the traders, and our trade with communist China.
hope commented at 12/22/2010 8:34:00 PM:
Oil hit $90 a barrel today. Donald Trump says every time our economy starts looking up, they hit us again.
hope commented at 12/24/2010 10:25:00 AM:
@OPEC:Please have mercy on America and put those 4 million barrels of oil back on the market that ya'll took away. Let that be our Christmas present. Thank you and MERRY CHRISTMAS to all oil thugs.
bigbluerider commented at 12/25/2010 4:32:00 AM:
Your missing the reason that gas is going up so fast. We our government that is, is printing money. That means that our dollars are worth less. Its also called inflation which according to our government we don't have. Elections have results and inflation is one of them.Greg McClintock
frank commented at 12/25/2010 11:31:00 AM:
Yep Greg. Let's hope the newly elected slow some of that type of thing down when they take office next month.
saywhat? commented at 12/25/2010 4:27:00 PM:
Why's gas higher in Columbus than anywhere else? Sometimes 10-15 cents a gallon. Is it OPEC LOL.
hope commented at 12/26/2010 12:10:00 PM:
@bigbluerider-----You're the one that's missing the reason oil is going up. It's to pay off Dubai's debt.
As for the falling dollar, it's falling because our economy depends mightily on the price of oil. Also, it is hard for the traders to make any money on the dollar as low as it is, but the price of oil is more volatile. We don't know at what price OPEC is comfortable with. Above comment byjls says $70 a barrel, but I'm sure they are happier with $90. BP has a big debt to pay also. It's similar to the CEO's of banks which they are responsible for collapsing, but walk away with millions for compensation instead of going to jail.
Don't intend to make it appear you are wrong, but it's OPEC,the traders and the oil companies making the price of oil rise.
Maybe we should pay them with gold instead of dollars.
hope commented at 12/27/2010 12:46:00 PM:
Today, OPEC ministers signal that production won;t be bumped up anytime soon, so oil jumps toward $92 bucks a barrel. One analyst says the American motorist is not making the price of oil go up, but the traders on Wall Street, who are gobbling up futures contracts.
I told you. Now do you believe me? Probably not, especially if some oil company paid someone on FOX news to say it's Obama's energy policies.