How high will fuel go?

[trekkor]

I saw diesel at $4.99 today in Napa

Will all grades top $5 this summer?



KT

[Mule]

I see it cruising to $6

[jcunning]

I'm not sure about gas pump prices, but I really don't see the ceiling yet at the price per barrel. It is currently going up around $1 a week. All we need is a nice hurricane to threaten to wipe out the gulf region again. This should jump barrel prices up another $20 easy.

I think that translates to about $.40-50 cents per gallon at the pump.

My guess is that we top out at $4.00 (for 87) for the summer and then hover depending if any outside interference raises the price even more.

In my opinion, I think oil prices are over inflated for the market but who knows for sure. I haven't seen the latest usage data from China and India to see how much oil they are taking this year. If they are only up 3%, then that doesn't add up with the rise of oil per barrel this year.

[JavaBrewer]

SoCal will see $5.00+ for 87 by the end of 2008. Sucks for us cause both cars take 91

[Hugh R]

$10 in the Netherlands we will float up to that by the end of 2010.

[Rick Lee]

I'm still amazed it's as cheap as it is. How many gallons of gasoline can you refine from a 55 gal. drum? If oil is now $130 per bbl., that's $2.36 per gallon and that's before it's refined, brought to market and taxed, let alone turned a profit for anyone. How in the world do they get all that done for only $1.50 in mark up?

[Danny_Ocean]

Hopefully, just high enough to get d-bags and soccer moms driving these off the road:

[mikester]

$4.05 for 87 at the 76 station on the corner from my house today. I pedaled on by on my bike watching some dude fill up his Merc.

[Gogar]

Originally Posted by Rick Lee

I'm still amazed it's as cheap as it is. How many gallons of gasoline can you refine from a 55 gal. drum? If oil is now $130 per bbl., that's $2.36 per gallon and that's before it's refined, brought to market and taxed, let alone turned a profit for anyone. How in the world do they get all that done for only $1.50 in mark up?

Rick, I think you need to remember that gasoline isn't the only thing that comes out of that 55 gal.

ie: The butcher doen't grab some filet and some NY strips and then throw the rest of the cow away.

They're making their money. A lot of it in a subsidy, but you get my drift, I bet.

[dd74]

According to an economist on the financial news today, the price of any given grade of gas may rise another $1.20 this year before leveling off or decreasing. The economist based this on both Goldman-Sachs and T. Boone Pickens' speculation of oil reaching $150 per barrel this year. The math works like this:

On average, a gallon of gasoline increases 3 to 6 cents per every dollar increase of a barrel of oil. Oil closed today (5/20) at a round figure of $130. If it is forecast to increase to $150 sometime this year, then you take the $20 difference and multiply it by the worst case scenario of 6 cents. The result: $1.20. Tack that onto today's price, and there will be your high for the year.

Enjoy it now, because in a few years, oil should be over $300 a barrel, making it near prohibitive for civilian use.

[Zef]

Demand goes up....price goes up.

[turbo6bar]

Originally Posted by Rick Lee

I'm still amazed it's as cheap as it is. How many gallons of gasoline can you refine from a 55 gal. drum? If oil is now $130 per bbl., that's $2.36 per gallon and that's before it's refined, brought to market and taxed, let alone turned a profit for anyone. How in the world do they get all that done for only $1.50 in mark up?

Actually, I believe there's only 42 gallons in a barrel of crude. That's works out to $3.10/gallon at $130/barrel. Add ~$0.60/gallon for state and federal excise tax, and we're up to $3.70/gallon. Throw in at least $0.25-30 for the refiners and retailer's profit, and we're kissing $4/gallon. That also assumes we get 42 gallons of gasoline from 42 gallons of crude, which we aren't.

Crude will continue to rise, until the market is derailed. Like Wayne, I believe the market has overridden fundamentals. Everyone has been primed to expect higher oil prices under no rational basis.

I support higher oil prices to encourage conservation, but these price increases are absurd. A liberal's wet dream this is.

[Porsche-O-Phile]

Yes. Over $5 by the end of the year to stay.

Gas has been hugely underpriced for many years in the U.S.

Hopefully this will result in some very long-overdue changes in behavior and more big, fugly, dangerous SUVs in the scrap yard in the very near future.

[targa911S]

Yes I don't be;ive they are 55 gal. drums.

I saw on the tube last week that the manufacturer of the numbers for signs is slammed with orders for 5, 6, and even 7 large numbers. That should be a signal.

[lendaddy]

Yep 42 gallons. I also agree with Wayne though, the spike is bubblicious. I saw a graph the other day and it made the Cali home value spike look like a mild adjustment. We are now at the time when every Tom Dick and Harry are speculating on oil, that's usually when the slaughter starts.

[MRM]

My WAG is about $5 to $5.50 by the end of summer. My thinking is that the US demand for oil and gas is pretty price insensitive, but that the Arabs know that in the long run we can start significant conservation and alternative energy efforts that will reduce demand quickly once they start to take effect. So in the short term they have us over a barrel, but it won't stay there for more than a year because we'll adapt and conserve.

That is actually good for the economy. Using less energy because it costs more saves money in the long run, and gives the economy the same boost as a tax cut. Much of the 1980s and 1990s expansions was attributable to the fact that energy had been more expensive, people and companies started conserving, and then prices went down. Of course we squandered the savings as energy costs went down, but in the mean time we enjoyed a great stimulous. The same thing might happen again.

[Rick Lee]

Originally Posted by Gogar

Rick, I think you need to remember that gasoline isn't the only thing that comes out of that 55 gal.

ie: The butcher doen't grab some filet and some NY strips and then throw the rest of the cow away.

They're making their money. A lot of it in a subsidy, but you get my drift, I bet.

I know and that would seem to make it even more expensive. A 2000 lbs. head of cattle doesn't produce anything close to 2000 lbs. of meat. And since the guys corrected me and a bbl. of crude is 42 gal. and not all of that can be refined 1:1 into gasoline, I really think gas is pretty cheap relative to the cost of oil.

[Tobra]

Very?

[MRM]

Actually the refining process gets more than 42 gallons of product out of 42 gallons of crude. The final product is less dense and much thinner than crude. I can't remember the physics of it, but I seem to recall they spilt the molecules or something to get more out of the barrel than they put in.

[ckissick]

Originally Posted by Zef

Demand goes up....price goes up.

Supply goes up, price goes down. Talk to the Saudis.