Probably the most significant word on gas prices these days is - OUCH! So many folks have been playing armchair quarterbacks on the subject, telling whomever will listen exactly what the problem is. I guess it's my turn!
To paraphrase Dr. McCoy of Star Trek "I'm an engineer, not an economist!". That said, even I recognize that prices go up and down based on supply and demand. Part of the supply process is, in the case of oil, the refining and transportation of the gas itself. Let's face it....no significant building of refinerys since the 70's sure puts us in a pinch. Couple that with requiring multiple types of gas in different areas of the country (boutique fuels) and that just complicates the refining process. Hint...if you can't refine enough of what ya' need, it's gonna make it cost more.
Of late, we are also in a pinch due to moving from MTBE to ethanol as an oxygenate additive. Ethanol is running, as of the end of March, $2.60 a gallon. The MTBE it replaces is running $1.60 a gallon. Plus ethanol is harder to transport and process. Hint....if the stuff added to the gas goes up in price, it's gonna make it cost more.
Also, China, India, and other parts of the world are competing for those barrels of oil. Makes it kinda like a large ebay bidding war...the more bidding on the supply, the higher the cost goes.
I honestly can't think of anything that's giving the possibility of oil getting cheaper. Outside of more production domestically, more refineries, better tax laws, well, you get the picture. If federal and state politicians could get their acts straight on things like ANWR, we'd be much better off.
On this subject, see the Gas Temperature Map out at www.gasbuddy.com.
Linked to Mudville Gazette.
-Colonel Steve
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