Cost of oil hits record high - gas prices up
Yes, we've avoided them for a while, but high gas prices have become a major hot button again. With Israel's attack on Lebanon last week, oil prices hit a record $78.40 per barrel before settling in at $77.03 -- still very high, and probably a hint of what's to come. Analysts predict that if Iran, which supports Hezbollah, gets pulled into the mess, we can expect the price to spike into the triple digits. Remember when Bob Lutz predicted that crude oil prices would settle back in in the low-mid $50s? Well, he was a little off.
On account of high oil prices, the cost for a gallon of gasoline is up sharply again, as well. Last week it rose to $2.973/gallon across the United States. That's about $.04/gallon above the week prior and $.65/gallon more than a year ago.
The development will likely further affect the purchasing decisions of car buyers, elevating the popularity of small, fuel-efficient vehicles such as the Honda Fit, SMART, Nissan Versa and Toyota Yaris.
[Source: Ottawa Citizen]
Reader Comments (Page 1 of 3)
emulous1974 9:14PM (7/15/2006)
My roommate just went up to Vermont this morning to go hiking and she said that Regular was only $1.85, down here in CT, our lovely legislature just added a new tax to gas, so in Hartford, a gallon of Regular is $3.09.
Irony...The fed reduced what one can deduct for a mile of traveling for business in 2006, yet gas prices are higher.
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Zo 9:14PM (7/15/2006)
Boone Pickens has been predicting $80 and potentially $100/barrel oil and he has been ahead of most of the "experts" -- then again, the cure for high prices is higher prices. I would not be surprised if we see $4/gallon gas in the next 6 to 12 months. If its not the middle east it will because the ethanol feed crops are hurting because of drought -- add to that states like CT that continued to increase the gas tax and gas it going to go higher for certain.
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Peter 9:17PM (7/15/2006)
I'm still waiting to see if increasing fuel prices mean that people will start driving less. Traffic seems as bad as ever, and surely they can't all be essential trips.
My prediction is that we won't see a noticeable decline in driving unless one of two things happens:
1) Gasoline prices rise far above their present level, possibly to $5/gallon or even more; or
2) There are major supply shortages, with the return of 1970's-style gas lines.
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emor8t 9:22PM (7/15/2006)
I really love to drive. However being a student in need of a better job, ive pretty much stopped driving anywhere that isnt less than 3 miles away or neccasary.
This sucks. I want to be able to drive for pleasure again damnit.
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John 9:26PM (7/15/2006)
wow I drive for fun too.
All regular people are mandated to drive a Nissan Versa, Dodge Caliber,or a Chevrolet HHR!
Mmmmmmmmmmmmm Spacious!
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chewy 10:26PM (7/15/2006)
Can Iran just cut its supply if it feels like it> If that would happen, we would definately have 4 dollar gas.
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Capitalist Pundit 10:37PM (7/15/2006)
Amazing how significant the "scare premium" can be.
So far only the unrest in Nigeria actually disrupted any crude production. The rest is all fear.
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epp_b 11:00PM (7/15/2006)
["With Israel's attack on Lebanon last week"]
I'm curious how this is actually related to fat, greedy execs hiking crude oil prices...
(I'm not being "smart" or sarcastic here, I really do want to know)
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ruggels 11:01PM (7/15/2006)
yes iran can and they will if isreal goes to war against them and we back 'em up.
i'm so glad to see everywhere (including the jpg) is still cheaper then southern california. yay for the sunny beaches and $3.49/gallon.
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UK-KID 11:13PM (7/15/2006)
You guys are Funny!!
Here in the UK we pay the equivalent of $1.60 USD per Liter, so if my math skills are correct thats $8.00 USD approx per Gallon.
Stop moaning, if you concentrated on Buying/Demanding small efficient cars with about 30-60 Mpg returns you would still be able to get around on the same budget. hope the price hits $7.00 USD per Gallon. that will almost eliminate the Escalade/ Navigator/ Excursion/ Denali/ H2 Buyers. let the people who want to bankroll ExonMobile Shareholders/Executives do the Overweight inefficient vehicle buying thing.
There are available over here luxury sedans that can average 42 Mpg and still accelerate from 0-62 in 6.5 secs and limited top speed is 155. they are in huge demand over here because it is the sensible thing to do economically and enviromentally and I suspect the governments 76% tax on fuel is the main proponent in the shift in thinking of the british carbuyer. this government can at anytime drastically reduce the cost of fuel by reducing the tax burden on it but that will just encourage whimsical buying of ineficient vehicles, and way we drive or commute .
That said other than NY City the US does not have a public transport system good enough to convince people to give up their cars for daily commute to work.
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epp_b 11:14PM (7/15/2006)
["i'm so glad to see everywhere (including the jpg) is still cheaper then southern california. yay for the sunny beaches and $3.49/gallon."]
$3.49 a gallon? I *wish* I were paying that!
In Canada, we're paying a $1.10 CAD a *litre*. That translates to about $3.70 USD a gallon. The last time I payed $1.00 CAD a litre (roughly equal to $3.49 USD a gallon) was near the end of last year!
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Chris 11:17PM (7/15/2006)
Yeah, even in Australia we pay a lot more for our fuel than in the US. Stop crying about it geez...
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pavster 11:20PM (7/15/2006)
Totally agree with UK-KID. Higher gas taxes are a very good thing, and they should have been implemented a long time in the US -- maybe just after 9/11 -- to ween us of our addiction to foreign oil.
As far as still driving for fun, just get a motorcycle :)
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UK-KID 11:25PM (7/15/2006)
(7) You are correct !!!
While the stratospheric prices in the UK are 76% Tax, The recent hikes in Crude Spot prices is Blatant profiteering by oil companies and Speculators on Unfortunate situations in the Middle east. There is very little chance of Iran cutting oil supplies to the USA for now and there is even less chance of the USA gettin involved militarily because of other Mistakes made in recent history ( You know what i mean) so what you have now is corporate greed at its best again and in about 3 years when the profiteers have finished lining their pockets and its too late to do anything about it the US senate will launch an investigation into the methods employed by these corporations.
Good Luck
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ruggels 11:28PM (7/15/2006)
anyone else amused we (American’s) always get called lucky and ignorant then receive a civics/gas/high fuel economy lesson every time we respond to a post like this. As though We don't receive CAR, EVO and TopGear on our doorsteps monthly or download TopGear every moment a new episode comes out... or say travel to Canada and Europe on an alternating basis every other month.
Oh wait, we do. Oddly, I was complaining about the prices I'm paying because they are high for my country. if you want to complain about Apple product prices being artificially inflated in the UK I won't stop you, so kindly allow people like myself, who, unlike the majority of the country here, do have a world view, do travel and do listen to the BBC and CBC on a daily basis, have our own due chance to complain.
Oh and last i checked I do have three VW's, all of which average over 40 MPG because, gasp, Californians do indeed buy TDIs.
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Cervus 11:33PM (7/15/2006)
I suspect the governments 76% tax on fuel is the main proponent in the shift in thinking of the british carbuyer.
There you have it. The high gas prices you have there is squarely the fault of your government.
Beyond paying for roads, it's not our government's job to manipulate individual behavior with fuel taxes. Besides, the UK has a far different geography than we do. Your population density is much higher, making both rail and public transportation more practical. And gas taxes are inherenty regressive, impacting the poor and middle class far more.
Besides, our clean air NOx regulations (Stricter than yours, I should note) prevent diesel passenger cars from being sold in five states, and nowhere in 2007 with the new Tier 2 bin 5 regs. Diesels are both more efficient and less mechanically complex than hybrids, and can run a fairly simple replacement fuel in the form of biodiesel without modification.
Unfortunately this means we're pretty much stuck with gasoline. However, there is a replacement in the form of bio-butanol. Butanol is a four-carbon alcohol with very similar combustion characteristics to gasoline and can run in engines unmodified as a 100% replacement. See www.butanol.com for details.
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chewy 11:56PM (7/15/2006)
I don't think that fuel taxes should be raised in the US. The first thing that should be changed is Gas Guzzler Tax should be implemented on SUVs and pickups. Right now those vehicles are the main users, but don't pay any fines for their guzzling.
http://www.fueleconomy.gov/feg/info.shtml#guzzler
The EPA people look like the biggest hypocrites in the world. Their site
http://www.fueleconomy.gov/
is full of articles that say that fuel economy is so important. Hypocrites.
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Zo 12:47AM (7/16/2006)
A few replies to the above posts:
#6 -- Iran could, but they will not because 80% of there economy relies on the sale of oil. They need the money like everyone else
#9 -- ExonMobile does not set the market price for oil. I know you have bloomberg and CNBC in the UK -- watch it sometime. They may benefit but they do not set the price. The UK just like in the US have investiaged BP many time and have never found them guilty of price fixing. In that same vein, you can blame Russia which has most of the worlds gold reserves for fixing the price of gold, they don't the financial markets do.
Finally, the US transportation infrastructure, geography and business centers are completely built on the idea of cheap fuel. Even if all of America drove cars that got 40mpg, we would still have high fuel prices for no other reason than there is no single federal standard for gasoline composition and each state has its own rules which increases the cost. Ethanol is also driving up the cost of gas and in bad crop years it will make it worse. One solution which is still far away is to use diesel (which has a single federal standard because of trucks) and biodiesel fuels for transportation. One thing we thing we can learn from the EU, it diesels are cool! and efficient. Even if we eliminated all SUVs, that would be only 5% decrease in consumption because oil is used in many other things besides driving from A to B. Oh, and in Brasil, there was recent sugar crop scare that sent prices up 50% in a single day, only to go down after a few days -- so there is no silver bullet for energy except to conserve
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iQuack 1:37AM (7/16/2006)
Just drove across the Golden Gate Bridge from Marin County back home to San Francisco.
Nice drive while getting at least 25 MPG or better in mixed driving in my Accord (last tankful was 28 MPG).
Most vehicles I saw were carrying one or 2 people in huge SUVs and trucks--made me wish gas would go to $10 per gallon.
It's clear to me that gas is too cheap when fat yahoos can piss away their dough on fuel for their monster vehicles that endanger the rest of us.
These lower primates have every right to drive what they choose, of course, but I hope it breaks their wallets until they have to eat mud.
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truthsayer 2:39AM (7/16/2006)
This is in response to the posting by iquack (fitting name by the way) about those of us who drive larger vehicles some of us have larger families and just because were not always all in the vehicle doesnt mean that extra family members dont exist. I also live in the bay area and i own a truck not a monster truck but a 4.0 liter engine none the less, i thought about getting a more economical vehicle. Unfortunately our family loves the outdoors a and a vehicle such as ours is necessary to carry gear that we use to enjoy our national parks and recreation areas, camping gear, etc. I just cant figure out how to fit all that into a toyota Yaris and still manage to get the vehicle up to a 6500 foot elevation without the vehicle overheating. In response to earlier postings about foreign gas prices, you also have to factor in other things for instance these other locations are socialist democracies, taxes are naturally higher but what saves you is that you dont have high costs for certain social commodities such as healthcare and the like. Its getting harder and harder to live in this country, but i guess we havent made our voice heard to our legislators or maybe like bush says they rather do what is right in their minds and for their pockets, than what is right for the people.
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