Filling it up just may empty your wallet

Drivers, if you didn’t fill up at the start of the week, you may regret it today.

And the crushing news is that the high price you’ll pay now likely will be eclipsed in the spring – when prices at the pump will approach $4 a gallon in Texas, experts say.

The average gas price in Houston jumped 12 cents over the last week to $3.38 a gallon Wednesday for regular unleaded. Motorists locally now are paying 46 cents a gallon more for gasoline than they were a year ago, according to AAA.

A whole rash of reasons can be blamed for the hit to your pocketbook. They range from high crude oil prices to the closing of refineries.

Then there’s the optimism that the economy is strengthening, which would boost demand. Normally, that’s good news, but not at the pump. Meanwhile, unrest in the Middle East continues to rattle the market.

“We are at a record price for crude for this time of the year and record for gas in most parts of the country,” said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University’s Cox School of Business.

In the spring, “prices in the high $3 range for Texas are quite probable at this point,” he said.

But Tuesday’s price bump “is a small move compared to what comes in March and April,” warned Tom Kloza, chief oil analyst at the Oil Price Information Service.

Kloza expects prices to go up in the spring because of high crude prices, the refinery closures and a “slight recovery in demand” during March, April and May.

Some doomsayers predicting that gas nationally will spike to $4.60 a gallon or higher are just attention seekers, he said. Still he says he’s “in the camp that looks for $4 a gallon to be exceeded.”

The market got the jitters earlier this week over the threat of a strike that could close some refineries. Also, during the fall and winter, two refineries on the East Coast were shuttered, along with a major plant in the Virgin Islands and some smaller ones in Europe. That prompted fears that gasoline supplies could be hampered.

And traders and speculators, too, have jumped on the bandwagon and bid up gasoline futures.

On top of that, the raw material for gasoline – crude oil – is up 3 percent over the last month. Gasoline prices have been guided by the price of benchmark Brent crude. On Tuesday, Brent traded for almost $111 a barrel. In July 2008, it traded at a historic high of $145.91.

“If you look at a graph, as Brent kept going up, gasoline followed. That’s the driver,” said Brian Youngberg, senior energy analyst at brokerage Edward Jones in St. Louis.

vvaughan@express-news.net

26 Comments

  1. tboyinhouston

    I bought a 40 MPG car and never looked back. When gas prices are 4.00 per gallon is it possible that you might stop driving your 10 MPG SUV all by yourself? Quit complaining and downsize your vehicle. The end of cheap fuel in the US is coming to a close, permanently.

    #1
  2. outsidelookingin

    This is an OUTRAGE!!!!!!

    #2
  3. Ralf

    Can someone please explain to me? Why are we closing refineries when we desperatly need to be building more?

    #3
  4. Slim Chance

    Tell me why the largest export item of the USA is gasoline? Why do we need to drill everywhere? Is it so ‘Big Earl’ can export the product to pretend the fuel is in short supply? We are getting the shaft. The price will go to $5.00 in August to influence the presidentail election. Watch and see.

    #4
  5. Peeper

    Yes but Food Stamp Barry to the rescue. His “Drill, Baby, Drill” mantra at his recent campaign speech in front of Congress should bring prices down. How’s that hopey change goin for ya?

    #5
  6. Hotpuppy

    Just typical market speculation…. followed by record profits for the supply chain. First step would be to limit commodity trading and require traders to take possession. That would limit speculation. Second step would be to limit exports of diesel, ethanol, and gasoline. We don’t need to be selling it elsewhere when we have a shortage (defined by high prices) here…

    #6
  7. Mortimer Hotclaw

    What was the price of fuel the day after obama was inagurated and what is it now? he’s doing a great job isn’t he? (sarcasm)

    #7
  8. Christian

    Oh no!!! It will cost me a whopping $1.50 more fill up…who cares?

    #8
  9. Mike

    Mortimer, you mean right as the Great Recession was hitting, millions of people lost their jobs and demand plummeted? Is that the time period you’re referring to? With its amazingly cheap gas?

    Thought so.

    #9
  10. chiefdecoy

    Not going to get better anytime soon. You idiots elected a man with NO energy policy.
    This man will end up making Bush/Cheney look like “second best friends” to oil companies. They are even more profitable during the Obama regime. Thanks…..
    Suckers!!!

    #10
  11. Dave

    The price difference between Obama’s inauguration and today is a fraction of the difference between GW Bush’s price difference…as if that meant something.

    #11
  12. Paul

    They’ve been hyping this (and even the thought of $5/gallon) up for a while now. Prices didn’t go down this last fall and winter like they usually do.

    Mortimer, the price of gas was about $1.60 when Obama was inaugurated. “Funny” how you didn’t mention the fact that it was about $4.10 just four months before that…and it hadn’t been below $2.00/gallon since 2004. The bar had never been set that high for gas prices before. Even during the early 80′s, the highest the average price reached (in today’s dollars) was about $3.50/gallon. All kinds of new precedents were set during the Bush administration.

    Christian, it’ll cost you about $1.50 more to fill up just this WEEK as compared to last week. Since it’s apparently “not that big of deal” for you, would you mind sending me that extra $1.50…or as much as you feel would be “necessary” to get people like me (and I still make more than the average American) to quit bringing up these pesky issues?

    STILL little to no mention of solar, wind or hydrogen technologies that have been on the table for decades now. We don’t even need oil or gas like we’re constantly led to believe from our “biased liberal media.”

    #12
  13. mr. stretchy

    I’m on business in Wales and have been driving a nice little diesel Peugot hybrid style crossover. Has a 2 liter engine and a 6 speed manual transmission and gets great gas mileage and is built better and rides smoother then most comparable USA Fords or GM cars. And when I filled it yesterday with still a 1/4 tank remaining it cost me just over £50 or about $75!

    #13
  14. Jim

    Paul:

    Your response to Mortimer did nothing to refute his claim. He didn’t mention gas prices during the Bush administration simply because it has no relevance on his factual argument. The fact remains that gasoline today is much higher than it was when President Obama was inaugurated. Pricing during the Bush years is completely irrelevent when faced with the fact that prices are much higher now than in 2009. Perhaps this is one campaign promise (“under my policies, energy prices will necessarily skyrocket”) he’s decidated to following through on?

    Also – not sure where you’ve been, but there have been many mentions of solar & wind technologies. Ever year of Solyndra? SpectraWatt? Beacon Power? Perhaps if our government officials spent less time trying to keep the windmills out of their multi-million dollar backyards and pushing them into Average Joe’s yard, and focused on actual solutions we’d get somewhere. Either that, or we’d end up spending billions more on failed green energy companies.

    #14
  15. Dan X. McGraw

    Jim, the president’s impact — regardless if he is a Democrat or a Republican — on gasoline prices has been debated numerous times on FuelFix. It’s easy for consumers to point the figure at oil companies and politicians for the rise at the pump; however, they aren’t completely responsible for what we pay.

    At the time Obama was inaugurated, gasoline average in the $1.60-$1.70 range nationally, but we were in the middle of one of the worst recession in U.S. history. As a result, oil prices dropped to the $40 range and brought pump prices down too.

    #15
  16. chiefdecoy

    Dan X.,,,,,
    Just because the economy looks better (driven by those with millions upon millions of dollars) the rest of America is STILL not fairing out so well. The ordinary American has little to do with Wall Street, outside of the consumption of goods. Higher pump prices WILL end up stifling available cash for them to pump into the economy, thus revisiting the stagnation of the economy. The President’s policies (or lack there of) can, and does, affect oil prices my friend…..

    #16
  17. chiefdecoy

    Let us not forget, that an oil company CAN drill all the wells they want, and NOT send it to market. They make the call if they decide the price of oil is where they want it, in order to open the valve and actually send the oil to market. It’s not about if they have the oil. It’s about providing the oil they have…..
    If that is not a method of controlling the price, I don’t know what you call it.

    #17
  18. CaptSternn

    SlimChance, gasoline is the product of refining crude oil. It’s the crude oil that we have to import. Oil companies don’t drill for gasoline.

    #18
  19. Dan X. McGraw

    More on this tomorrow. I spoke with some people on the topic.

    #19
  20. Bob

    Time to go electric. It’s cheap and easy, and the price is more stable.

    #20
  21. Dan X. McGraw

    Chiefdecoy, are you arguing a president’s policies (drilling and exploration) directly impact the price of the pump?

    Even if you open up all areas to oil drilling, oil companies would only develop those properties if there was a return on their investment. Oil companies are smart — that’s why they make money.

    #21
  22. Greg in TX City

    The demand for energy; gasoline, crude oil and everything our daily live depend on that come from oil will never go away. It will just cost more money to utilize it. It’s just like tobacco products; I can remember when a pack of smokes cost 50 cents. Now a pack is over $5.00 and people continue to buy them and puff away. I drive a 3/4 ton diesel truck and I don’t mind paying for the fuel to enjoy it. That is my choice. I have no intention of driving a crackerbox that I have to plug in every 35 miles. I work in a refinery and the cost to turn crude oil into usable fuel is mind boggling. So, if we want to play, we have to pay. That’s just the way it is. Get over it people.

    #22
  23. MJ

    Electric vehicles are still powered by a product of the petroleum industry (gas, fuel oil) and coal is being phased out. Nuclear and renewables are a fraction of our total generation. Electricity cannot be stored in large quantities or for long periods of time (batteries), so it is actually quite unstable, price-wise and subject primarily to the cost of natural gas, among other feedstocks. What is the APO on the price of an electric vehicle?

    Oil companies make an average ROI of 7-9%, not a large profit margin, by any stretch. Look at the ROI percentage of other companies/industries. Oil companies are “for profit”, so, like many other companies, they operate to create jobs, pay taxes, reinvest in renewables and new production and technology and, make a profit. Or, they go out of business.

    Also, when looking at the cost of a gallon of gasoline and historical cost per gallon, check the taxes.

    http://www.fueleconomy.gov/feg/gasprices/faq.shtml

    #23
  24. Trail_Tramp

    Nothing wrong with electric cars, but unless they have a break through in battery technology, CNG makes more sense.

    #24
  25. m9777

    mr. stretchy…good for you! There’s a good reason Peugot isn’t sold here in the USA any longer. They were called “Pewgot” by too many buyers.

    #25
  26. Paul

    Jim – “Your response to Mortimer did nothing to refute his claim.”

    This is what Mortimer said: “What was the price of fuel the day after obama was inagurated and what is it now?”

    1) How exactly do you “refute” a question?
    2) When did I ever insinuate that I did refute his comment?

    Jim – “He didn’t mention gas prices during the Bush administration simply because it has no relevance on his factual argument.”

    No relevance, huh? So the fact that the price of gas was around $4.10 four months before the specific, cherry-picked date Mortimer mentioned (which, btw was during a huge recession AND the only period gas was below $2.00 per gallon since 2004…while gas hadn’t been that expensive since the Reagan administration…and prices were on their way back up when Obama actually took office) doesn’t mean anything to you? I’m gonna “go out on a limb” and assume that you’re not an economist.

    Jim – “Pricing during the Bush years is completely irrelevent when faced with the fact that prices are much higher now than in 2009.”

    That’s not true. Precedent matters…especially when there’s money to be made. Do you really think that if, say, milk went down to about $2 or $3 per gallon for a few months…it would “stay” that way from then on? I didn’t vote for Obama, and I’m certainly not a “fan”…and he hasn’t done anything to stop this crap…but the moment that big oil seemed to realize that there would be little to no backlash from these kinds of gas prices over a sustained period of time happened on Bush’s watch…and possibly in his living room in Crawford.

    Jim – “Also – not sure where you’ve been, but there have been many mentions of solar & wind technologies.”

    There is basically zero real debate about solar, wind or hydrogen technologies in the mainstream. Yes…I’ve “heard of” Solyndra. Have you “heard of” the solar power plants in other parts of the world that can power towns of over 100,000 people day and night?

    We don’t need to build those things in people’s back yards, either…and hydrogen energy should probably be our energy source for our transportation system(s). Of course…our transportation system needs to be almost completely redone, but that’s a whole other issue.

    I guess we can agree that the government sucks…

    #26