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AP: High Gas Prices Not Obama’s Fault!

From an only too happy to explain Associated Press:

Gas prices are about more than just oil

By Jonathan Fahey, AP Energy Writer Mon Mar 7, 2011

… Gas prices rise when oil prices rise, and fall when oil prices fall — except when they don’t. What you pay at your gas station depends on an array of factors, from what happens on an exchange in New York to what the competition is charging.

This can rankle drivers, especially these days. Gas reached a national average of $3.51 a gallon on Monday. That’s up 14 cents, or 4 percent, over the past week. The week before, the average rose 20 cents, the steepest increase since September 2008.

A year ago, the price was $2.75. The average is the highest it’s ever been this time of year, and analysts expect it to climb higher in the coming weeks.

Unlike an iPhone or a pair of jeans or a Big Mac, oil and gas are commodities, and their prices can change every second at the New York Mercantile Exchange and other trading hubs. Those far-off changes affect the cost of the next day’s commute.

Sellers of commodities, like gas station owners and refineries, price their product based not on what it costs to produce it, but on what it costs to replace it. Stations… [get] shipments of gas several times a week, must constantly adjust their prices to keep up with the changing costs of their shipments.

Oil is the biggest factor in gas prices. It accounts for 50 to 70 percent of the cost. Recent upheaval in the Middle East and strong demand for oil around the world have pushed oil prices over $100 a barrel for only the second time in history. But the price of a gallon of gas at the pump rises — and, yes, falls — for a number of other reasons.

Oil prices can be moved by geopolitics, the value of the dollar, extreme weather or Chinese demand. Gas prices can be moved by oil prices, refinery problems or even weather that might keep drivers at home

In any case, one thing is absolutely clear — oil and gas prices have nothing whatsoever to do with who is President.

"We have to pay whatever the market says we do. It’s an instantaneous world," says Joe Petrowski, CEO of Gulf Oil, a big gasoline wholesaler…

There are only two or three pennies per gallon in profit selling gas for most station owners…

Wholesale gasoline prices have risen 38 cents per gallon, or 15 percent, since the first uprising in Libya on Feb. 15. When wholesale gas prices rise fast, filling station owners get squeezed or even lose money because competition prevents them from raising retail prices as fast as costs are rising.

So if it seems that station owners take their time lowering prices when oil and wholesale gas get cheaper, it’s because that’s exactly what they do.

"If gasoline prices drop a dime, a station will only pass along one or two pennies a day," says Patrick DeHaan, an analyst at GasBuddy.com, a website that collects and publishes retail gas prices. "They are slower to pass along the discount because they need to make up for money they lost when prices went up."

And we believe this.

This article was posted by Steve on Tuesday, March 8th, 2011. Comments are currently closed.

18 Responses to “AP: High Gas Prices Not Obama’s Fault!”

  1. 12 Gauge Rage says:

    One can only blame the president so much. But if he were to merely suggest that we should drill for our own oil, I know it would drive down the cost. But overall, I blame the speculators of Wall Street for this mess. No, I’m not anti-capitalist, but I wish Wall Street would grow a pair and stop freaking out over international incidents that they fear will rock the boat in their perfect little world.

    One can only imagine how the battle of Roarke’s Drift would’ve ended if officers Chard and Bromhead were as cowardly as the speculators/investors on Wall Street. There, I’m done ranting.

    • BillK says:

      I hear you, but the point is it’s the job of Wall Street traders to freak out at the possibility of changes in supply levels.

      To do otherwise would be shirking their job responsibilities, as if something did happen to reduce supplies and investors lost their shirts, people would be clamoring for their heads on a pole.

    • proreason says:

      Speculation rises and speculation falls, but the policy to prevent drilling never changes.

      It’s not the speculators fault, it’s the libwits’ fault, including the Libwit in Chief who has done nothing but make drilling more and more difficult for 25 months, including defying court orders to allow it.

  2. untrainable says:

    Gas prices are about more than just oil
    Yeah, and global warming is about more than just the sun. It’s just the single most important factor. If we were drilling for oil in the midwest, the price would go down. If we were drilling in the gulf, the price would go down. If we were drilling in Alaska, the price would go down. There are any number of energy strategies that Obama could take to begin to bring the price of oil/gas down.

    It’s not his fault that he chooses to do nothing. It’s not his fault that we can’t drill in the gulf. It’s not his fault that we’re not drilling in Alaska. It’s not his fault that no new oil drilling permits are being issued. It’s not his fault that… wait a minute. YES IT IS!!!!!!!

    • JohnMG says:

      If power generators weren’t forced to burn natural gas instead of coal, prices would go down. If they were allowed to build nuclear power plants, the price would go down. When Obama is no longer in power, the price will go down.

      All of the above is true. However, unless pigs begin to fly out of his ass, Obama will remain president at least ’til 2012!! Hang on, boys-n-girls. It’s gonna be a rough ride

  3. tranquil.night says:

    “What you pay at your gas station depends on an array of factors, from what happens on an exchange in New York to what the competition is charging.”

    “If gasoline prices drop a dime, a station will only pass along one or two pennies a day. They are slower to pass along the discount because they need to make up for money they lost when prices went up.”

    How do you rectify these statements?

    • proreason says:

      Some people predicted gas would shoot over $3 shortly after the election.

      I guess they knew Qaddafy Duck was destined to fall.

    • tranquil.night says:

      Even without foreseeing a MidEast crisis, it wasn’t a tough call with how hostile to domestic drilling the regime is.

      The wise investor understands at the eye of the storm is our monetary policy and across the board commodity inflation – everything Petronius predicted.

  4. preparing4theworst says:

    Ok, flash from an oilfield native where sometimes our local paper actually prints news from real sources. Remember pre-katrina when $80 – $90 oil= $1.90 to $2 gas? but now $90 oil= $3 gas. Then the price of oil began to climb and several thingd happened 1) the citizens said enough and cut down their driving resulting in a market surplus which started the price of oil AND gas down,, 2) The speculators got a new law handed to them that increased the cost of speculating and helped the price go down, 3) a small article in my local paper covered an announcement by several independants that they were considering the building of several new refineries (which would increase the market supplies) and LO and BEHOLD!! prices of both oil and gas dropped steeply over the next couple of months thus lowering the incentive (evil profit motive) of building more refineries..never heard any more about them either and 4) (this is one of the biggies so pay attention) an article came out in which a spokesman explained that the refiners wolud be “practicing discipline” concerning the amount of product they would process in order to “stabilize prices” and hold retail prices at a “reasonable level”…reasonable= at a higher profit margin for the refiners. Now I am not opposed to anyone supplying a product or service making a profit, but this means it is no longer about incoming supply, but about what quantity the refiners will ALLOW on the the open market…..anyone want to build a refinery and help drop prices????

  5. tranquil.night says:

    “Anyone want to build a refinery and help drop prices????”

    Good luck with that.

    It ain’t the speculators or suppliers or competition who’ll be there stopping you.

    • preparing4theworst says:

      It will probably be multiple govt agencies all of whom have rules to enforce…..maybe the same rules, just different wording……and fines

  6. oldpuppydixie says:

    High gas prices are only BUSH’S fault. EVERYBODY knows that!!! Nothing bad is EVER Hussein’s fault.

  7. canary says:

    Obama planned to raise the cost of fuel and energy before he was ever elected.

    I recall watching Obama & Hillary both say in a debate that we should be charging Iraq oil. If Bush had said this….

  8. BillK says:

    It’s almost as if there’s some economic law regulating gas prices having to deal with how much oil is being produced and how many people want to buy it…

  9. pamypo says:

    Wonder what the AP wrote when our last president faced a rise in oil prices. I think I remember some people calling for him to go beg the Saudis to drill more. Wish I had access to those old stories. I bet they blamed that President!

    • scythemantis says:

      There is utterly, utterly no way you can rationally pin the gas prices on Obama. I haven’t heard one argument that wasn’t just a conservative pulling nonsense out of their ass.

    • proreason says:

      “There is utterly, utterly no way you can rationally pin the gas prices on Obama”

      what a monumental idiot this guy is.

      Obama has blocked drilling in the US in every way conceivable, including defying MULTIPLE federal court orders to reinstate it in the gulf.

      If drilling were opened in the US, gas prices would fall 25% in a month.

      And that doesn’t even count his absurd junior-high actions and lack of actions with Egypt and Libya.

      And even that doesn’t count his even more absurd comments made during the campaigns about wanting the price of gas to go up, just not then, and also of bankrupting coal companies. Those comments are probably increasing the price of oil by 20% all by themselves.

      He is certainly the stupidest and most evil person to ever hold high office in this country, by far, ever.

    • JohnMG says:

      …..”He is certainly the stupidest and most evil person to ever hold high office in this country, by far, ever…..”

      With the possible exception of scythemantis.


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