Off topic Gas prices

> Okay - explain this one to me.  I filled up my truck at $1.73 a gallon
> today -

Gas prices are up everywhere for several reasons.  The biggest reason was
the 7 week strike in Venezuela when they stopped all pumping and shipping of
oil.  The Venezuelan oil fields just came back into production two weeks ago
but are only pumping half of what they used to pump.  The US gets a large
percentage of oil from Venezuela so this was a huge hit.

Another reason is that due to the strike in Venezuela the people who deal in
this stuff panicked and ran up the futures market on oil, driving up the
price per barrel regardless of where it comes from.   The reserve kept by
the US is down  and is  usually only topped off when oil prices are cheaper.
There is a lag time of several months from the time oil is purchased and the
time it is refined and makes it to the pumps.  It is illegal for gas
stations to raise prices on gas currently in their tanks that was bought
cheaper but many do so anyway knowing their next shipment will cost them
more.

There was no actual shortage per se since other oil producing countries
stepped up production and shipment to the US to make up for the loss of the
Venezuelan oil.  The problem is transporting it here is expensive due to the
distance.  Venezuela is relatively close when you consider the distance to
Russia, Saudi Arabia and elsewhere thereby adding to the cost per barrel.
Had Canada and Mexico stepped up production we wouldn't have felt such a
pinch since they are next door.  It can take 2-4 weeks  for an oil tanker to
cross the Atlantic or Pacific and make it to one of our ports adding to the
lag time.

Higher gasoline prices also equals higher diesel prices so the tanker trucks
transporting oil and gas cost more to operate which adds to the price at the
pump.  It's the domino effect.

Not all crude oil is created equal so getting twice as much from one source
doesn't necessarily translate into a replacement for what was lost or
missing.  Some is more suitable for say home heating oil as opposed to
others that make fine gasoline's or lubricants.  The harsh winter up east
and elsewhere also contributes since many use oil for home heating.  Oil is
refined for heating oil leaving less to be refined into gasoline.  Supply
and demand drive the prices up as with any commodity.

Anyway, once Venezuela gets organized again and we start receiving our
normal allotment, gas prices should come down again.

Here in south Texas gasoline is running  $1.48-$1.65 per gallon with prices
expected to rise shortly.   We had these prices in the past with the oil
glut but up until recently were in a gas war so prices were much lower,
sometimes down to $1.10 a gallon.  Now that they are back up to what they
were it appears to be a big jump and people take notice.  It's like buying
something on sale then having to pay regular retail to replace it and
feeling ripped off. LOL

Hang in there, spring will be here soon, the demand for home heating oil
will drop and more oil will go into gasoline production dropping the prices.
Hope this helps.

Linda
San Antonio, TX

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