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Thread: Gas prices at new highs

  1. #1
    Vulture of The Western World Eric's Avatar
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    Gas prices at new highs

    U.S. gasoline prices have jumped to the highest levels ever for the middle of February. The national average hit $3.127 per gallon on Friday, about 50 cents above a year ago.

    The price is about 6 percent higher than on this date in 2008. The next day, pump prices began a string of 32 gains over 34 days. They rose 39 percent over five months, eventually hitting an all-time high of $4.11 per gallon in July.

    Although gas prices are expected to rise, most experts aren't expecting a reprise of 2008, when the price spike forced many drivers to join car pools and trade in gas-guzzling SUVs for fuel-efficient cars.

    "It would be a mistake to think we're going to have that all over again," said OPIS chief oil analyst Tom Kloza.

    He says oil demand will slide in the U.S. by May, as refineries slow fuel production while they switch to summer blends of gas. World oil consumption also may not rise as much as expected.

    And Kloza contends that oil traders are more cautious now, after getting burned when oil plunged to $33 per barrel in early 2009, just six months after hitting $147 per barrel. Even the most bullish traders no longer think they can chase commodity prices higher without risk, he says.

    Still, Kloza expects gas to reach $3.50 to $3.75 per gallon this spring because of the usual run-up in prices ahead of the summer driving season. That would mean an increase of 12 to 20 percent from the current level.

    Gasoline climbed almost 10 percent since November as oil prices rose because of factors including stronger demand from China, a frigid winter in the U.S. and tension in Egypt, Kloza said.

    The price of Brent crude, a key oil contract that also influences U.S. gasoline prices, hit $100 per barrel in January for the first time since 2008.

  2. #2
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    Two factors at work here. QE2 which is devaluing the dollar in the world markets, making commodities more expensive. Second, the extremely cold, harsh winter we have been having. I think that the first factor has more to do with fuel prices than the second, although the second can produce spikes in oil demand.

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    The day of the hybird and electric vehicle is here. In five years time you'll see a major change on American roads that is more hybrids and spot an electric car here and there. I've noticed everything is getting smaller and more fuel efficient. My Honda Civic is not the top dog of gas standards anymore. Probably not even in the top ten.

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    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by Adam View Post
    The day of the hybird and electric vehicle is here. In five years time you'll see a major change on American roads that is more hybrids and spot an electric car here and there. I've noticed everything is getting smaller and more fuel efficient. My Honda Civic is not the top dog of gas standards anymore. Probably not even in the top ten.
    I dunno. I'm very doubtful about the economics of hybrids and electric cars.

    I think gas would have to get to at least $6 per gallon to make them cost-competitive and even then, I dunno.

    You can go out and buy a 41 MPG Ford Fiesta - for $14,000 - vs. a Prius that gets (real-world) 45 MPG that costs $23,000. Or a Volt that costs $40,000.

    It'll take a while to make up the difference.

    Or, if you're really smart - go out and buy a used Toyota Corolla (or similar) for about $6,000. It'll get solidly in the 30s on the highway and mid-high 20s around town... and you can probably drive it for the next 10-plus years. Paid-for. Cheap insurance. No real cost of owning beyond gas.

    Plus, there's winter.


    Electric cars and 15 degrees will probably not go together real well.

  5. #5
    Senior Member misterdecibel's Avatar
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    Prices are nowhere near the all time high.

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