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Page added on August 15, 2019

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Get Ready for $2 Gas

Consumption

The summer of 2019 is starting to look like the summer of 2016. That year, gasoline prices started below $2 a gallon in winter. They rallied slightly into the summer but hugged the $2 line for most of the next nine months. U.S. gas prices dropped 13 cents this month, compared to July, and the pressure on the price is sharply downward, according to the AAA.

Gas prices are already below $2 a gallon in parts of these southern states: Louisiana, Mississippi and Alabama. They are close to the oil supplies from the Gulf of Mexico and the huge refineries near the Texas coast. In some areas in this region, prices have plunged since April. Those states also have among the lowest gasoline taxes in the country. Here are the states with the highest and lowest gas taxes.

Nationwide, the price of a gallon of regular is just above $2.60, but several forces will continue to drive it down, probably for the rest of the year. Domestic gasoline supplies are abundant. Refineries are humming after periods when they were partially shuttered for maintenance and upgrades. The end of the summer travel season, a period of annual peak demand, ends in a month. Most importantly, oil supplies are abundant.

The abundance of crude is a perfect storm for high supply. Supply from fracking in the northern Plains states and central Canada continues to be at or near an all-time high. There are threats to shipping in the Strait of Hormuz, through which a quarter of the world’s oil consumption moves. Several tankers have been seized there. Iran is one of the biggest oil producers on Earth, and these are the 15 countries that control the world’s oil.

However, the greatest downward pressure on oil prices is a slowdown in growth of some of the world’s largest economies. The German economy, the world’s fourth largest, shrank last quarter. The U.K. economy shrank during the same period. The economies of Brazil, Italy and Mexico have flattened. Argentina’s economy has started to dissolve into chaos.

Most importantly, China, the world’s second-largest economy, posted manufacturing expansion that hit its slowest rate in nearly three decades in the second quarter, compared to the same period in 2018. Many economists expect that the trade war with the United States will slow China’s gross domestic product (GDP) growth further. By most measures, China is the world’s largest consumer of oil. The United States has slipped to second. However, the United States now produces more oil than it uses.

The body of opinion about the world’s economy is that many countries are tipping toward recession. Even if that does not happen, both the International Monetary Fund and the World Bank expect much of the GDP growth by nations will falter. Even so, the wealthiest nations in the world will still remain so. These are the richest countries in the world.

Several factors affect gas prices. However, oil continues to be the primary one. With pressure on, gas prices will continue to drop, likely rapidly. Get ready for $2 gas by autumn, at least throughout much of the country.

24/7 Wall St



8 Comments on "Get Ready for $2 Gas"

  1. PROFESSOR (CHIEF) TIMOTHY ADEDEJI AWONIYI J. P. on Thu, 15th Aug 2019 9:19 pm 

    Davy has convinced himself he’s a clever little cancer monkey.

    It thinks by ratcheting-up the ID theft and sock puppetry he can run everyone off or he thinks he can make conditions so intolerable that he will get his way.

    The trolls’ intentions are so damn obvious that it’s funny.

  2. Robert Inget on Thu, 15th Aug 2019 10:56 pm 

    Trump bashes NH protester: ‘That guy’s got a serious weight problem’
    Rebecca Morin, USA TODAY

  3. Anonymouse on Thu, 15th Aug 2019 11:14 pm 

    Ameuikans and their cheap oil subsides. Its all they think about, other than war and whats on the ‘tube’ tonight. They rejoice over ‘cheap’ oil and close to non-existent taxes, then complain about all the externalities unrestricted consumption of FF, be it smog, sprawl, congestion, traffic jams, increased taxes for road maintenance, whatever create. Americans almost love to complain about the downsides of FF’s almost as much as they love cheap subsidized oil. What they seldom, if ever do, is make the connection between the two. Because that kind of think requires a minimal degree of non-linear thinking and that is not how (most) amurikans were trained and bred.

  4. Robert Inget on Fri, 16th Aug 2019 9:06 am 

    If it were not for excessive rain, farmers would have drained the so called glut in diesel.

    “U.S. President Donald Trump’s sanctions against Iran and Venezuela have inadvertently increased demand for a Russian brand of crude oil, boosting revenues for the nation’s exporters”.

    “Russian oil companies received at least $905 million in additional revenues between November and July, data compiled by Bloomberg show. The calculation is based on difference between the Urals spread to the Brent benchmark over the period compared to the five-year average”.

    The sanctions added to a jump in demand for Russian crude in the wake of output cuts from the Organization of Petroleum Exporting Countries and their partners. As a result, Russia’s Urals blend of crude has started to regularly trade at a premium to Brent.

    “There is a shortage of competing heavier, sourer crude right now as a result of sanctions on Iran and Venezuela, but also because of OPEC+’s current production cut agreement,” Konstantsa Rangelova, analyst at JBC Energy, said by email. “Urals in the Mediterranean is at an all-time high.”

  5. Robert Inget on Fri, 16th Aug 2019 9:30 am 

    Posted Note:
    An event that will certainly turn oil markets bullish; Built on permafrost, a major Alaskan or Siberian pipeline collapse can’t be blamed on
    anything but AGW.

    https://earther.gizmodo.com/a-weather-station-above-the-arctic-circle-hit-94-6-degr-1837274379

    Amid the hottest month in recorded history, some records still stand out as absolutely jaw dropping. That’s definitely true of a measurement made in the Arctic this July.

    According to data released in the National Oceanic and Atmospheric Administration’s (NOAA) monthly climate analysis, a weather station in Sweden north of the Arctic Circle hit a stunning 94.6 Fahrenheit (34.8 degrees Celsius) last month. As an isolated data point, it would be shocking. But coupled with a host of other maladies, from no sea ice within 125 miles of Alaska to the unruly fires ravaging Siberia, it’s an exclamation point on the climate crisis.

    The steamy temperature was recorded on July 26 in the small Swedish outpost of Markusvinsa, which sits on the southern edge of the Arctic Circle. Deke Arndt, a NOAA climate scientist, said on a call with reporters that the data was analyzed and quality controlled by the Swedish Meteorological and Hydrological Institute and that “they have established that as highest temperature north of the Arctic Circle” for the country. For comparison, the hottest temperature recorded in New York City last month was 95 degrees Fahrenheit (35 degrees Celsius).

    The heat wave that enveloped the Arctic spread a lot farther than Markusvinsa, though. Alaska recorded its hottest month ever amid extremely weird weather for the state. The heat has driven massive wildfire, and smoke from those fires enveloped Anchorage and Fairbanks, the former of which has had its smokiest summer on record, according to Alaska weather expert Rick Thoman. Salmon dieoffs, the earliest walrus haul out ever recorded, and emaciated animals have also been reported around the state.

    During the same press call, Thoman expanded on the reasons why it’s been so weird in Alaska. The big one is the disappearance of sea ice six to eight weeks ahead of schedule, which has left a 125-mile ring of open water around the state. Oceans were already warm going into the summer, but the dark exposed ocean water has absorbed even more heat compared to the normally reflective ice cover.

    Thoman called it “remarkable warmth” and said it surpassed the oceanic heat wave dubbed The Blob that gripped the northeastern Pacific in 2015. The hot oceans have in turn heated up the land. Increased evaporation has thus cranked up the humidity, leading to some uncomfortably warm nights in Alaska.

    Just as the heat hasn’t been confined to Markusvinsa, the disappearing sea ice isn’t just an Alaskan coast thing. The Arctic Ocean as a whole recorded its lowest July sea ice extent ever, which could have in part helped fuel a bizarre lightning storm just a few hundred miles from the North Pole. Sea ice was a staggering 19.8 percent below average, dipping well under the previous low set in July 2012. Sea ice stans may recall 2012 as the year sea ice hit a record minimum extent. While we’re still six to eight weeks away from the annual sea ice minimum, and things could change in the coming month or so, this year’s icepack is in decidedly bad shape.

    July’s Arctic heat is part of a larger global trend driven by carbon pollution. The NOAA data released on Thursday also confirmed that July was the hottest month ever recorded on Earth, with temperature edging 1.7 degrees Fahrenheit (0.95 degrees Celsius) above the 20th-century average. Based on the heat in the first seven months of 2019, the world is almost certain to have one of its five warmest years on record. Using data analyzed separately by Berkeley Earth, climate scientist Robert Rohde tweeted that there’s a 90 percent chance that 2019 will go down as the second hottest year on record, trailing only 2016.

    Here in drought stricken S. Oregon, inland cities regularly get high temps of 110 F.

  6. Kenz300 on Mon, 19th Aug 2019 2:58 pm 

    It is still cheaper to drive an electric vehicle powered by solar panels with energy from the sun.

  7. Rick on Tue, 20th Aug 2019 8:58 am 

    It’s up to the individual if they want to drive or not.

  8. Rick on Tue, 20th Aug 2019 11:41 am 

    $2 gas. Deal with it.

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