Peak Oil is You

Donate Bitcoins ;-) or Paypal :-)

Page added on May 31, 2014

Bookmark and Share

$4 gas fuels shock and awful words

Four-dollar gasoline has made an unwelcome and unexpected return.

Prices of regular, unleaded rose to within a penny or two of $4 per gallon yesterday across central Ohio, according to, with a few retailers hitting the $4 mark. Analysts say the increase is because of a national surge in demand that is hitting the state particularly hard.

This is in contrast to reports earlier this month that prices likely had peaked.

“There is strong demand, and supply is not as robust as needed,” said Brian Milne, an editor at Schneider Electric, a service provider to the energy industry. “That’s a market signal to produce more supply and bring more supply to the area.”

Ohio gets much of its fuel from a wholesale market in the Chicago area, which has seen an unusually large price increase. The current wholesale price is the highest since July, Milne said.

Central Ohio’s average price for regular unleaded was $3.91 early yesterday, up 12 cents from the day before, according to AAA. The price was $3.73 a month ago and $3.66 a year ago.

Retailers were caught off-guard by the sudden increase.

“We have no explanation,” said Chad Rasul, co-owner of M&S Carryout on the West Side.

On Thursday, the Energy Information Administration reported that U.S. gasoline inventories dropped by

1.8 million barrels from the week before, which was more than many analysts had expected.

This news “was likely a large part of the reason for this recent spike,” said Kimberly Schwind, spokeswoman for AAA Ohio Auto Club.

Rising fuel demand is often a sign of a healthy economy, indicating an increase in business activity and recreational travel.

But analysts say it would be premature to say there is a trend.

“There was some pent-up demand,” said Tom Kloza, chief oil analyst for and the Oil Price Information Service.

By that, he means that people might have done more traveling than normal for a Memorial Day weekend, a reaction to a long winter when they traveled less.

Three weeks ago, Kloza said that prices had likely peaked for the year and were drifting downward. He still thinks that market fundamentals are pointing toward lower prices, although the peak is coming later than he would have expected.

“I still believe that the trend, and the trend for most of the summer, is going to be for temperate prices, which means lower prices,” he said.

Ohio, with an average price of $3.86, is one of six states with an average price that is up more than 20 cents from a year ago, according to AAA. Pennsylvania and Kentucky are both up

25 cents; South Carolina is up 24 cents; Alabama is up 22 cents; and North Carolina and Ohio are both up 21 cents.

According to, Columbus prices were still rising yesterday evening, with the stations that were below $3.99 climbing toward that point.

16 Comments on "$4 gas fuels shock and awful words"

  1. Makati1 on Sat, 31st May 2014 4:43 am 

    Many would be happy to get $4 gas. Try Europe or the Philippines for instance.

  2. Juan Pueblo on Sat, 31st May 2014 6:00 am 

    I admit I am so selfish that I want gas to go to $6 at least, so that there is less traffic. I remember the empty streets of 2008 and 2009 and get nostalgic.

  3. Marty on Sat, 31st May 2014 6:20 am 

    Was up in Toronto, Ontario, Canada a few weeks ago; gas prices were around $1.32 a liter, which is over $5.00 a gallon, highways were full of cars easily going over 70 MPH. Over $5.00 gallon does not seem to be bothering them, why is it such an issue to pay over $4.00 a gallon here?

  4. rockman on Sat, 31st May 2014 6:27 am 

    Juan – Yep…classic double edged sword. A couple of years ago I cooked lunch for a group of families having a yard sale. They were selling stuff (like some of their kids’ toys) to raise gasoline money for their share of the car pool they used to get to work. The reality of demand destruction: it hits the low end of the economic pyramid hardest.

  5. Juan Pueblo on Sat, 31st May 2014 6:39 am 

    Rock, obviously didn’t really mean it, but have had the thought while driving, and have no doubt some people feel like that. I have family and friends going through tough times like most of us.

  6. Beery on Sat, 31st May 2014 6:59 am 

    Bring on $10, $20, $30 gasoline. Speaking as a car-free cycling safety instructor who commutes everywhere by bike, it would be nice to cycle to school with my daughter on roads that are not clogged with motorist morons who don’t have the first clue about the rules of the road or how to operate their vehicles safely around cyclists. I’m as worried about peak oil as the next guy, but this particular aspect of the problem seems like a solution to me, and as far as I’m concerned it cannot come too soon.

  7. Davy, Hermann, MO on Sat, 31st May 2014 7:05 am 

    Rock/Juan, I too have longing for the empty deserted roads. They will come. When we get fuel shortages or economic decline we will see empty roads. Hirsch made some great point in his book “The Impending World Energy Mess” we only need a small shortage of fuel to cause exponential drop in discretionary driving. The reasons are twofold. The first reason is naturally the critical services must continue so they will garner the first supply. This will leave the remaining supply as rationed in some way. Hirsh brings up many policies and or mechanisms for rationing. Some of these are lower income directed. Here in the US driving is essential so help will be needed for the lower classes to ensure at least some transport capabilities. The second reason is what a shortage of fuel does to a just in time complex global economy. We will see a much worse situation today than in the 70’s. The world is far more interconnected and global today. A shortage of liquid fuels can dramatically shut down the economy. In fact large segments of the economy will shut and some kind of central authority will be needed to open up the essential parts of the economy. Of course this will depend on the length and severity of the fuel shock. It will only take a few weeks for segments of the economy to go down for good making reboot very difficult. The most complex and interconnected segments will fare the worst. The critical nodes of command and control will take severe hits. The all-important financial system will freeze up stranding the life blood of trade and exchange. I am fascinated why there is nothing in place for the public to turn to in this situation. The global economy is in a precarious situation where a small shortage can have a huge impact and no serious thought has been made on mitigating this situation

  8. Davy, Hermann, MO on Sat, 31st May 2014 7:11 am 

    Beer, good thoughts but not in the cards. Prices that high are just another definition of shortage which will kill the global economy. Critical industry and nodes of survival will shut down at that price. You will be biking to find food I assure you. I am a bike rider. Since I do most of my work alone on the farm I have to move equipment around. A bike is perfect to do this. I do a hard ride twice a week to inspect the wildlife on the farm. I am investing in bikes for post BAU. I have several for trade and barter.

  9. Juan Pueblo on Sat, 31st May 2014 8:16 am 

    Davy, to have something in place to turn to in this situation requires previously accepting that the situation exists, something beyond most people’s capabilities, it appears.
    Beery, I bike, paddle, and walk daily for commuting and entertainment purposes, and use my wife’s car a couple of times a year at the most.

  10. hculliton on Sat, 31st May 2014 12:00 pm 

    Beery: be careful what you wish for. In Ontario each school day, a single bus uses $250 worth of fuel. Given that we have a lot of rural areas requiring lots of bussing, $30.00 gas would crash our school system. Yes there are work-arounds: 1 room school houses and distance learning for example. But until those concepts are on-line, our education system would evaporate and deny an entire cohort access to education. A fast crash from hyper-expensive oil has a lot of very unpleasant side effects.

  11. J-Gav on Sat, 31st May 2014 12:38 pm 

    Yep, Makati. As I think I’ve mentioned before, like Beery, I’ve stopped driving for some time now. Not playing ‘holier-than-thou’ because I may end up having to go back to it some day …

    but I do continue to check gasoline prices occasionally anyway. Recently, what they call SP98, a fairly standard measure, averaged around $6.00 a gallon in France and the people here (well-known for their strikes and protests) are not (yet) up in arms about it … So, yeah, $4 doesn’t impress me that much.

  12. Perk Earl on Sat, 31st May 2014 2:03 pm 

    “I admit I am so selfish that I want gas to go to $6 at least, so that there is less traffic. I remember the empty streets of 2008 and 2009 and get nostalgic.”

    Me too, Juan P.! I remember being able to drive anywhere at anytime in the SF bay area and not worry that I would get stuck in traffic. There was plenty of room between cars – such a luxury! 6-7 bucks a gallon – whatever it takes to get those people out of my way.

  13. Roman on Sat, 31st May 2014 4:13 pm 

    Screw “education”. Everyone is retarted cuz of it.

  14. Makati1 on Sat, 31st May 2014 7:55 pm 

    The current US form of ‘education’ is doomed anyway. We will not truck our kids 20-30 miles to some government sponsored daycare facility where they learn how to be good little drones for much longer. Nor will ‘on-line’ education be the replacement. The internet is doomed to fail about the time the school buses stop running. Lack of resources to maintain and power it and money to buy the hardware.

    So, yes, bring on $10 gas and soon. It will hurt, but is coming anyway. My trip to the States will just go up as it takes ~200 gallons of jet fuel to get me there and back. Another $1,200 Charmin dollars is cheap for the improved air and less traffic. (RT $2,900., instead of the $1,700 now.)

  15. Jeff Pierson on Sun, 1st Jun 2014 12:19 am 


    US Crude Oil Exports Hit 15 Year High
    Energy Boom: US Crude Oil Exports Hit A 15-Year High
    11:50 AM 05/30/2014

    U.S. oil exports are continuing to boom as world demand for American petroleum grows along with skyrocketing domestic production. Government estimates show that U.S. oil exports reached a 15-year high in March.

    The Energy Information Administration reported that the U.S. oil industry exported 246,000 barrels per day in March 2014 — the highest level since 1999. Crude oil exports have exceeded 200,000 barrels per day in four of the last five months and crude oil production reached 8 million barrels per day in February.

    But U.S. lawmakers are saying that crude oil exports could be driven even higher if the federal government got rid of strict limits on exports. Some Republicans have been calling for the Obama administration to lift the effective ban on crude oil exports to help drive down the U.S. trade deficit and spur energy development.

    To export crude oil, a company must apply for a license from the Commerce Department which can be approved or denied by the government depending on a number of factors. Export restrictions on U.S. crude oil exports came out of the OPEC oil embargo during the 1970s — a time when energy was viewed as a highly scarce resource.

    “The current rules of engagement on energy trade were written at a time of energy scarcity, not abundance, and they are causing distortions in the market that is undervaluing America’s energy resources,” said Alaska Republican Sen. Lisa Murkowski.

    “It’s time to reverse a policy that has far outlived its usefulness – something that would benefit the entire country,” Murkowski said.

    Environmentalists and some Democrats have opposed allowing more oil exports on the grounds that such action would contribute to global warming. Liberal groups have also argued that lifting the export ban would drive up gas prices.

    “There is no concrete independent analysis that lifting the ban on crude oil exports would leave gasoline prices or energy security unaffected,” wrote Daniel Weiss and Miranda Peterson of the Center for American Progress, a liberal think tank founded by now White House adviser John Podesta.

    “Until there is, President Obama and Congress should resist pressure from Big Oil to trade away our enhanced gasoline price stability and energy security in the name of more oil profits. Instead, they should defend the ban on crude oil exports,” Weiss and Peterson added.

    But a recent analysis by the consulting firm IHS found lifting the U.S. crude oil export ban would boost domestic oil production by more than 2 million barrels per day and lower gasoline prices by 12 cents per gallon.

    Energy analysts and the oil industry argue that U.S. refiners are mainly geared towards refining heavy crude oil from the Middle East or Canada, not the light, sweet crude that is coming out of U.S. shale formations. This has led to a glut of oil sitting in the U.S. while refiners build up their capacity to handle the lighter crude.

    The glut of oil has kept the price of U.S. produced oil artificially low, meaning refiners can increase their profit margins since the prices of refined petroleum goods, like gasoline, are set on global markets.

    “The IHS analysis reinforces what I’ve been saying for months — modernizing the regulations that govern energy exports will create jobs, boost energy production, and help lower global oil and gasoline prices,” Murkowski said.

    Almost all the crude that has been allowed out of the U.S. has gone to Canada — most of the recent oil exports have been from the Gulf Coast region. Exporting to any other country besides Canada is rare. These exports have mainly been re-exported crude oil, meaning the oil extracted abroad and is simply being passed through the U.S. to another country. U.S. companies have re-exported crude oil to China, Costa Rica, France, South Korea, and Mexico.

    Read more:

  16. Dave Thompson on Sun, 1st Jun 2014 12:56 am 

    Instead of demand destruction, I want to call it affordability destruction.

Leave a Reply

Your email address will not be published. Required fields are marked *