gas prices

How to get better Gas Mileage

gasmileageSummer is generally regarded as the big driving season, as families hit the road for small or large vacation trips between Memorial Day and Labor Day.  In order to help conserve fuel and money, GasBuddy offers a free smartphone app, which has been downloaded more than 25 million times to help motorists find the lowest gasoline prices in their area. In addition to the app, you can save money by improving your gas mileage with a few easy tips and techniques. For example, by utilizing cruise control one is able to maintain a constant speed over long distance, which often saves gas. To learn more ways to improve your gas mileage click here or visit www.kimberleyvassal.com.

 

 

How much can the President really do to control gas prices?

President Barack Obama speaks at Cairo Univers...

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Rising gas prices have put a damper on President Obama’s political fortunes—54 percent of the respondents to a new CBS-New York Times poll said they believe the president can do a lot to control prices at the pump. And nearly two-thirds of the respondents to an ABC-Washington Post poll saidthey disapprove of how Obama is handling the issue. It’s perhaps not surprising that Obama saw sharp drops in his overall approval rating in both polls.

Political rhetoric aside, how much can the president really do to control gas prices? Not all that much. The major cause of the recent spike—gas rose to $3.80 a gallon this week—is the increasing tension with Iran, most analysts say. That’s making traders nervous about a possible conflict in a crucial oil-producing region, which could have the effect of cutting off a significant source of the world’s oil. In addition, Japan has been using much more oil since shutting down virtually all of its nuclear power plants in the wake of the Fukushima disaster last year. And various conflicts in Sudan, Yemen, Syria and Libya have choked off some production in those countries.

Republicans say opening up the United States to more domestic drilling would bring prices down. Newt Gingrich has been hammering on that theme lately in his quest for the Republican presidential nomination, saying he has a plan to reduce gas to $2.50 a gallon. But American consumers are part of a global market for oil, and crude oil accounts for about three-quarters of the cost of a gallon of gas, according to the Energy Information Administration. So increasing domestic production wouldn’t do much to ease prices. Not to mention, it would take years to come to market and start bringing prices down even marginally.

President Obama could tap the Strategic Petroleum Reserve, as was done during the first Iraq war in 1991, after Hurricane Katrina damaged refining facilities in 2005, and by President Obama during Libya’s civil war last year. But this has generally been done as a temporary measure in response to one-off supply disruptions, not as a policy response to rising prices. Indeed, experts say the impact on prices has generally been only temporary.

All of this sounds like bad news for President Obama—but here’s something that might give the White House more reason for optimism: Despite what voters say, there’s not much evidence that oil or gas prices on their own are a significant factor in determining presidential elections, according to Nate Silver, the New York Times’ statistical guru.

Still, prices at the pump don’t exist in isolation. The fear is that they could put a crimp in the economic recovery, by leaving Americans with less money in their pockets and thereby slowing down consumer spending. If that happened, voters would almost certainly blame Obama.

Eight Reasons Gas Will Hit $5 This Year

Check out this article posted by Yahoo.com regarding the price of has and why they think it is going to rise in the near future… The price of gas is a widely covered news item these days. Oil prices have moved up from $75 a barrel in October of last year to more than $100 a barrel currently. And the trend continues to point toward even higher oil prices. Of course, along with the price of oil, gas prices have also risen, almost in lockstep.

24/7 Wall St. reviewed the major reasons that gas prices have risen in the past quarter and analyzed whether the causes will improve or worsen. We have estimated how much each factor could increase gas prices. Together, those increases would be enough to push gas prices up by another $1.50.

1. Strait of Hormuz

About 20% of the crude oil produced in the world is shipped through the Strait of Hormuz, and Iran has threatened to shut down shipping traffic through the Strait. At its narrowest, the passage is 30 miles wide, so there is a realistic case that a conflict could close it. Iran has already been isolated as a trade partner by U.S. and EU sanctions. The regime in the country has made a number of threats about what it might do if its “national interests” were threatened. If Iran follows through with its threats, the period the passage is closed could be very brief if the U.S. Navy, which has a carrier group in the region, moved to reopen the lane. But it is not clear that the American government would make that decision without the open support of allies or the United Nations. A closure of the passage, or any escalation that would make a closure more likely, will drive oil prices higher — and by extension, gasoline prices.

2Iran

Iran contributes to a second problem in terms of global oil supply well beyond that of its ability to interrupt supply. Because of the embargo against the nation due to nuclear weapons violations, the U.S. has pressured large oil importers such as Japan to act to isolate Iran by cutting their imports. This puts Japan in a position in which it has to tap even tighter global supply. Japan apparently has agreed to cut its Iranian crude imports by 20%. But as the world’s third largest oil importer, Japan indeed will have to get its oil somewhere other than Iran — which will put more pressure on current production.

3. Refiners Likely to Raise Prices

Most of the oil refined on the east coast of the U.S. is Brent crude, a type of oil produced from the North Sea. The price of Brent — more than $124 a barrel — is almost $16 higher than the price of West Texas Intermediate (WTI) crude, the amount most people read about in the media. But because Brent has replaced WTI as the global price benchmark, U.S. refiners set prices for gasoline and other products as if Brent were the only grade of crude used. That allows refiners with access to cheaper WTI to make larger profits.

However, when the prices converge, as happened in the final two months of 2011, WTI refiners lose their edge — and their hefty profits. “Refiners were losing money in November and December. You can only lose money for so long,” John Felmy, chief economist for the American Petroleum Institute, recently said. Many large refineries are owned by public companies that do not have much appetite for posting ongoing losses. To avoid losses, refiners will have to increase gasoline prices.

4. Other Geopolitical Risks

Iran does not present the only geopolitical challenge to oil production. In Nigeria, which is the 14th largest producer of oil in the world, Islamic terrorist group Boko Haram has continued to attack Christian areas of the country. The Nigerian Army has reacted by attacking Islamists. Militants have continued to attack pipelines, apparently in a move to disrupt the government.

Meanwhile, there are concerns about supply even from Venezuela. Venezuela is the world’s 11th largest producer of crude. The regime there has been fairly stable under the 13-year reign of Hugo Chavez. But Chavez is due for a second cancer surgery later this month. The Miami Herald recently wrote that “some analysts question his [Chavez] ability to hold onto the presidency through the current election cycle.”

Other parts of the Middle East and Africa are also in turmoil. Analysts recently mentioned Bahrain, Libya, Iraq, Nigeria and Yemen as political flashpoints. “The world faces oil supply risks from a multitude of sources, not only in the Middle East but also in Africa. In our view, not since the late 1970s/early 1980s has there been such a serious threat to oil supply,” Soozhana Choi, Deutsche Bank’s head of Asia commodities research, said in a note to clients recently. All these flashpoints translate to further concerns about oil supply. And when oil supplies are tight, the price of oil — and gasoline — increases.

5. European Union Recession

For now, Greece has been bailed out again – a move that should buoy confidence in the region and encourage demand for oil. Even with the Greek bailout, however, the eurozone is not out of the woods as nations continue to implement austerity measures to protect against the risk of default on sovereign debt.

6. U.S. Economic Recovery

An improved U.S. economy means higher oil prices. U.S. GDP, employment and even housing have all staged unexpected improvements in recent months. Many economists now peg a 2012 GDP increase at more than 2%. The new White House budget assumes growth of 3% by 2013. An average of more than 100,000 jobs has been created in each of the past six months. And an extension of payroll tax cuts through the end of this year may further aid the employment recovery. An extension of unemployment benefits means that hundreds of thousands of American who would have no income, will have at least enough to consume basic goods and services. The argument that Americans now drive less is not a powerful one for gas and oil demand when a healthy economy also means more consumption of oil for business, petrochemicals and jet fuel. Demand for oil-based products across the entire economy will pick up with any recovery.

7. It Is Almost Summer

In the U.S., summer vacation driving has historically boosted demand for gasoline. Over the past three or so years, however, that boost has been small, if present at all. In 2011, U.S. traffic volume decreased year-over-year in every month except January and February. But that was last year. So long as the U.S. economy continues to improve, more drivers will be on the road this summer.

8. Supply Risk

In December 2011, OPEC members produced nearly 31 million barrels a day, cutting the cartel’s spare capacity capability from 3.18 million barrels per day to 2.85 million. Saudi Arabia accounts for 2.15 million of those daily barrels of spare capacity.

Whether this data is accurate is arguable. What is not arguable is that starting to pump the spare capacity will take time, which will not be very helpful in the event that the Strait of Hormuz is closed or some other geopolitical risk is realized.

Then there is Russia, the world’s first or second largest producer, depending on which day you look at the data. The OECD is counting on Russian production to make up for some of the short supplies and to grow by 1.4% to 10.72 million barrels a day in 2012. Russia grew its production by 1.2% in 2011. An additional gain of 17% in 2012 could signify that the OECD is hoping that Russian production can grow even more. There is no guarantee that Russia will deliver.

Supply from Canada, the U.S., Australia and Brazil is expected to rise in 2012, though North Sea production is expected to fall. The OECD estimates global demand in 2012 of 90 million barrels a day and global supply essentially equal to projected supply. Nothing about that state of affairs should lead anyone to a conclusion that prices will fall.

Gas Prices Drop For Now

Gas prices have fallen over the past two weeks, continuing their slide despite an increase in crude oil prices, according to a survey published Sunday. The average price of regular gasoline is $3.29 a gallon, the Lundberg Survey found. That’s down 9 cents from two weeks earlier, and down a total of 18 cents over the past six weeks, said publisher Trilby Lundberg.

While crude oil prices rose $3.55 a barrel over the past two weeks, gas prices fell due to “shrinkage in the profit margins of the downstream portion of the oil industry — that is, refiners and retailers,” Lundberg said. “They were unable to pass through the higher oil prices because American motorists’ demand for gasoline continues to shrink due to hard economic conditions.” However, it’s unlikely prices will continue to fall, Lundberg said., because refiners and retailers “will not be able to sustain losses on and on.” “It will all depend on what crude oil does,” she added. The latest average gas price is 38 cents higher than it was a year ago. For more information check out the full article at CNN.com 

Gas prices likely to have hit bottom

$4.06 Gas Prices, Lewiston, Maine, Cumberland ...

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After two months of decline, gasoline prices have hit the bottom for this summer and are likely to remain stable or increase slightly, an expert said. After International Energy Agency announced it will release its emergency oil stock to make up for the loss of Libyan oil, some members of Organization of Petroleum Exporting Countries implied they will cut their output to keep the prices up. “I don’t see $4 a gallon as imminent, but it’s certainly possible,” said Patrick DeHaan, senior petroleum analyst for GasBuddy.com. “I don’t see the prices going lower than where we are today.” For more about gas prices, read the full story by clicking here.

Better fill up soon, Gas Prices on the rise again!

Gas prices in the United States are on the rise, with a 6 cent increase per gallon in 1 day!  Why do we see this sudden increase?  Some say it is due to the Libyan leader Moammar Gadhafi’s threat to destroy his country’s oil fields.  This threat is driving the price of crude oil to $100 per barrel, which hasn’t reached that level since 2008.  Since it has reached $100 per barrel for crude oil, we have seen a big jump in the United States gas prices on land and in the air.  Airlines are also incurring the higher fuel cost by adding an extra fuel surcharge to most flights.  These surcharges add about $20 to a round trip within the US and much more for an international flight. Visit Kimberley Vassal Insurance to learn what we can do for you!