Florida gas prices are creeping closer to $5 a gallon. The state average jumped 18 cents last week, reaching a new all-time high of $4.76 per gallon on Sunday.
In Palm Coast on Monday, regular gas was selling for $4.72 to $4.76 at gas stations on State Road 100 and Palm Coast Parkway, with the lowest reported price in the region at the Hess station on U.S. 1 south of Korona, where it was selling for $4.65. Similar prices are in effect at stations at the intersection of I-95 and U.S. 1. Lower prices are at Buc-ees on LPGA Boulevard and I-95 ($4.57 a gallon) and at Sam’s Club ($4.52).
It’s a global surge: the average price of gallon of gas in France today is $7.95, it is $8.43 in England, and at the end of May, it was $5.5 a gallon in China.
The price of West Texas Intermediate crude oil peaked on Sunday at $120.82, short of the $123.70 peak set on March 8. It has since fallen to $118 this morning, $1 a barrel more than at the beginning of the week, but further fluctuations are expected.
Oil-company stock prices are surging, too: Exxon’s share price is just under $100, up from $60 at the end of the year, a 67 percent increase, Chevron is trading above at $176 a share, up from $115 in December, a 53 percent increase, Shell is trading at $60 a share, up from $44 in December, a 36 percent increase, and so on.
Florida gas prices are now 66 percent more expensive than a year ago. It now costs $71 to fill an average size 15-gallon tank of gas, or nearly $29 more than what drivers paid a year ago.
“Unfortunately, the pain at the pump is likely to get even worse this week,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “Gasoline made very strong gains in the futures market last week. When that happens, we normally see retail prices rise. It can take days or a week for pump prices to reflect the change, but It wouldn’t be a surprise to see retailers raise their prices another 20 cents by Monday night. At this rate, it sure seems like there’s very little resistance to rising prices at the pump, and $5 a gallon is quickly becoming a very real possibility this summer.”
Gasoline future prices increased 24 cents per gallon from the week before, reaching a new all-time record high. Although OPEC+ announced plans to raise oil production by 648,000 barrels per day. (OPEC + refers to the Organization of the Petroleum Exporting Countries’ 13 Middle Eastern and African members, and Venezuela, and the plus refers to 10 additional countries, including mexico, Brunei and Bahrain, but also including Russia.)
Oil and gasoline futures prices traded significantly higher last week as the European Union’s Russian oil ban contributed to ongoing global supply concerns, while expectations of global fuel demand increased after China lifted Covid-19 restrictions in Shanghai.
Additional factors weighing on futures prices include a large draw in gasoline supplies and growing exports, amid rising global competition for fuel. This week’s EIA report revealed:
- U.S. crude oil stocks are 15 percent below year-ago levels
- U.S. gasoline stocks are 6 percent below year-ago levels
- Gasoline demand is up 2 percent from a year ago
- Domestic refining capacity is down 5 percent from two years ago
- Gasoline exports are up 89 percent compare to this time last year; 37 percent more than a week ago
Regional Prices
- Most expensive metro markets – West Palm Beach-Boca Raton ($4.90), Fort Lauderdale ($4.79), Miami ($4.79)
- Least expensive metro markets – Pensacola ($4.57), Crestview-Fort Walton Beach ($4.59), Panama City ($4.60)
| Gas Price Overview | Oil Price Overview |
| Sunday’s Avg. Price – $4.76 per gallon
Cost for a Full Tank – $71 (15 gallons) 2022 High – $4.76 per gallon (June 5, 2022) 2021 High – $3.36 per gallon (Nov. 2021) Record High – $4.76 per gallon |
Friday’s U.S. Oil Price – $118.87 per barrel
Previous Week’s Closing Price – $115.07 per barrel 2022 High – $123.70 (Mar. 8, 2022) 2021 High – $84.65 per barrel (Oct. 2021) Record High – $145.29 per barrel (July 2008) |
Roy Longo says
What happened to the Desantis promise to lower gas prices via reducing gas tax?
Jimbo99 says
In Biden’s America, the miserable life of Biden’s Build Back Better lies continue.
Ray W. says
Some days, Jimbo99 posts excellent comments. Other days, he goes off the rails. This is not one of his good days. Perhaps, the best explanation for his going off the rails is that he possesses two significantly different hats. On his good days, he wears his zealous advocate for the truth hat. He goes off the rails when he puts on his partisan hat. I have long argued that skepticism is a healthy human trait when coupled with intellectual rigor. Whenever partisanship enters the equation, intellectual rigor all but disappears.
Oy vey!
Daniel Downer says
Get used to it folks. It’s not going back the other way at any considerable measure ever again. It’ll only continue to go up and up. There’s only about 40-50 years worth of oil left in planet earth. That’s at the current consumption levels, so could be even less. Think about that a sec. No more oil in less than 50 years. Your babies and grandbabies will live (hopefully) to see a world with no oil, and no articles from the local news outlet about the price of it.
The irony will be in how the dinosaurs’ extinction will indirectly lead to what will likely be at least a near extinction of humans and 90% of all other species on earth 66 million years later. The humans will continue to fight over the oil, burn up the atmosphere during the bickering anyways, and ultimately and simultaneously launch the tens of thousands of nukes we’re all anxiously sitting on so we can show who has the bigger pecker. We’re just going to be another sedentary layer that’ll be talked about millions of years from now on local PBS stations by a yet to be born intelligent species.
If your Jesus Saves, now sure would be a good time to do that.
James says
“There’s only about 40-50 years worth of oil left in planet earth. That’s at the current consumption levels, so could be even less.”
Can you cite your source to justify this statement? For all I know the planet could be awash with crude oil, the point as I see it is it doesn’t matter. Even if there were oil to last a thousand years, we couldn’t use it due to climate change.
What I’d like to see is Elon Musk forget about twitter and space, and focus on making his car company the world leader in affordable EV’s. Doubt it will happen though.
FlaglerLive says
“A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again: the founder of the Association for the Study of Peak Oil first claimed in 1989 that the peak had already been reached, and Mr. Schlesinger argued a decade earlier that production was unlikely to ever go much higher.” From a Mark Lynch OpEd in the Times, August 24, 2009.
Deborah Coffey says
I thought the fascist Republican governor was going to fix this! Maybe this is one explanation why not…. https://electrek.co/2021/06/23/florida-governor-bill-thfossil-fuels/
MikeM says
Don’t blame the governor.
Blame that senile idiot Biden and his minions.
Like they really care about who can afford gas as long as they can afford it.
You sheep just keep electing these morons.
James says
Well, we’ll have to see if Biden dances cheek to cheek with Saudi royalty when he meets with them in a few days. Perhaps he will, who knows? You know, like the “great” messiah did… while brandishing a sword no less. They must have known him well… as one would a most trusted friend. Honestly, I never recalled seeing anything quite like that before, but the “great” messiah was quite exceptional.
Momma says
We are just back from Europe where the gas price (converted from liters to gallons) was well over $8.00/gallon. Is that Biden’s fault too? It’s a global issue not just here in America.
Ray W. says
Thank you, Momma. No, the current rise in gasoline prices is not directly attributable to Biden’s energy policies. The profit motive, that age old description of human economic behavior, is the major cause of the rise in gasoline prices around the world. OPEC wanted more money, so it voted to significantly cut production. International crude oil prices, having hovered in the $35 per barrel range for a long time, immediately began to rise, peaking at about $85 per barrel. Then, Putin decided to invade the Ukraine. Biden had nothing to do with OPEC’s vote and Putin’s invasion.
Stop Making Sense says
Don’t worry about gas prices or food prices for that matter. Let’s talk about what’s important like transvestites, racism, abortions and recently declassified UFO footage.
Lou says
The US has limited oil refinery capacity. The Capitalist will not make investment in new oil refinery so your retail gasoline prices go down. If you question me just check the profit statements of the involved business entities.
Gulf cart type of transportation is in your future
wow says
Also interesting…. the energy sector reported 57% profits YTD. As opposed to the negative numbers of most other sectors.
InflationIsGlobal says
It’s almost like 2 years of being shut down for COVID and a war in Ukraine has something to do with opportunist gas and oil companies taking advantage of the global consumer. It’s not just the US. Inflation is every-effing-where. Europe. Asia. Canada. South America. Australia. Literally every corner of the planet is being torched by greedy CEO’s and shareholders. But no one ever holds them accountable.
Biden is one person. He’s not a king. Republicans voted down punishing gas and oil. Dems voted for it. It stalled in the Senate because of Manchin. Biden can’t EO everything. He’s not responsible for inflation when it’s happening on a global scale. I’m not even a fan of his but by damn if I’m going to vote for the party that wants to make me a second class citizen with no bodily autonomy or control. I refuse to vote for the party that is going to go after birth control, interracial marriage, lgbtq marriage, and even divorce. I refuse to vote for the party that wants to examine kids genitals to verify they are a girl or boy. THEY are the groomers and pedos. I refuse to accept mass shootings are a way of life here.
The Nazi’s said it best – accuse the other side of everything that you actually are – which is what the fascist republicans are doing every time they open their mouths. It’s sick. I won’t live in a Christian-fascist nation. And yes, believe me, I’m already looking into my escape if the fascist reds take over.
Bye Bye Man says
Didn’t everyone say they were leaving when Trump was elected but not surprisingly they didn’t. See ya, you won’t be missed!
A.j says
Well said.
Sherry says
@InflationIsGlobal. . . Absolutely loving your comment! Rational thinking from a “thinking” person who still lives in the real world . . . what a concept! Right there with you!
Justsayin says
You have not seen anything yet. Travel around the state and see how how many fields where not planted this year. With the price of fertilizer triple (fuel based) and the price of diesel that’s needed from feild to table, real problems are ahead.
Maybe you should educate yourself with ESG also. Consipary theory? Prove it.
G A says
Very well said. Let those with eyes see and those with ears hear.
G A says
This, like the pandemic, is a world wide issue, not just the USA. Sad that the pain at the pump continues for all of us while the rich get richer.
MikeM says
Including your blue leaders. Pelosi, Biden, Schumer and all their ilk.
G A says
I know you folks don’t give a whole lot of thought to many things….but let me explain this using little words, and I’ll talk slow. Why on earth would the Democrats be the deliberate cause of rising prices at the pump and otherwise, when this is mid term elections year, and the rising prices are hurtful not helpful to our party. The correct answer is…we wouldn’t. In fact, we are doing our best to get these problems resolved here in our country. Again…this is a WORLD WIDE PROBLEM.
Justsayin says
If only 20% of all electric in the US is from renewables, why would the President invoke the Defense Production Act for solar panels? The US makes about 1% of all solar panels. Who makes the majority of solar panels? China 72%. Why not impose the DPA on the oil companies to produce more oil?
In contrast, This administration band all drilling on Federal Land until a Judge blocked the band in March of 2021. Now with a oil crisis he helped create, They said oil could be drilled on federal land again. This time with a LARGE caveat: 80% of the land nominated to open was eliminated by the Bureau of Land Management (“BLM”). The other 20% was on land that already been drilled on. The second issue is the royalties. The federal government raised the rate to 18.75% from 12.50%. I thought only big oil were the greedy ones.https://www.bhfs.com/insights/alerts-articles/2022/biden-administration-reopens-federal-lands-for-oil-and-gas-leasing-under-reformed-program
Learn more about ESG and how it will affect the oil and gas industry. https://www.12eleven.com/news/the-importance-of-esg-in-the-oil-and-gas-industry?hsLang=en#:~:text=Historically%2C%20Environmental%2C%20Social%2C%20and,positions%20along%20the%20priority%20scale.
This is a man made crisis which is going to get much worse. The technology is not in place to make clean energy work. Go price a solar system for your home. what is your ROI? You may want to invest anyway. The chance for rolling blackouts across the country are elevated.
Ray W. says
I have been waiting a long time for a comment like the one Justsayin posted. Thank you.
The reason we don’t invest in solar research and factories is purely political and its name is Solyndra. It was not a mistake to invest in solar research. It was an error to invest so much in Solyndra. There is a significant difference between a mistake and an error. One political party took great pains to take advantage of the Solyndra error, poisoning any possible efforts by our government to invest in solar research and factories. Given that the one political party’s commonly false mantra is that only private industry can produce jobs, the Solyndra error resonates to this day. I will now offer an account of why the one political party’s mantra can often be false.
At the time of the Solyndra error, I reflected on a very old in-depth article (some 45 years ago) that I read concerning the struggles that arose during the development of the post-WWII Japanese motorcycle industry. About 10 or 15 years ago, I stumbled on a 300(+) page doctoral thesis published by a Canadian graduate student who researched the history of the Japanese motorcycle industry from the turn of the 20th century, via interviews of industry leaders and researching company records, among many other sources. His thesis supplemented my recollections of the old article.
With Japan’s industrial base largely destroyed by bombing during WWII, hundreds of Japanese companies and engineers cobbled together motorcycles to meet the very small demand for personal and small-business transportation. Yes, Soichiro Honda designed a small engine and built it in his garage at his home. The engine was mounted by brackets on the handlebars of a bicycle and a lever was used to lower its flywheel onto the front wheel. Before and during the war, Honda’s manufacturing company supplied piston rings to the Japanese military aircraft industry. Since Japan had, and still has, little in the way of natural resources, gasoline was in very short supply after WWII. Personal automobiles and business trucks and transports were expensive to operate. Few people could even afford to buy a motorcycle. By the mid-50’s, the Japanese government recognized the chaos spreading throughout the motorcycle industry. Some 50 or so different companies sold motorcycles. Some designed engines and frames and bought tires, suspension pieces, carburetors, gas tanks, and other items from supplies. Other companies developed engines only and sold them to companies that only built frames. Hundreds of satellite companies competed to build the wheels, tires, carburetors, handlebars, gas tanks, and other accessories. Companies competed for loans from banks. Families invested their life savings in purchasing franchises to sell the motorcycles. A new company would pop up and another company would declare bankruptcy. People paid for motorcycles that were never delivered. Manufacturers defaulted on debts, causing the satellite companies to fail.
The Japanese government announced a series of races throughout the country. All motorcycle companies were invited to enter a motorcycle. There was only one paved racecourse in the country, so one of the races was held at that venue. Another race was held on blocked-off city streets. There was a hill climb, a cross-country race on a paved road and what might today be described as an enduro. The five companies that amassed the most points at the end of the competitions were awarded government grants to modernize their assembly plants and invest in research and development. All of the other motorcycle companies were allowed to wither on the vine. We know the five companies today as Bridgestone (yes, it sold motorcycles in America until the early 1970’s, before the company decided to concentrate on developing its tire products and supply the other four companies), Honda, Kawasaki, Suzuki and Yamaha. With only five surviving motorcycle companies, the number of suppliers competing to provide ancillary products also contracted. Mikuni and Keihin provided carburetors. Showa and Kayaba supplied suspension pieces, and on and on. Clearly, government investment, when properly supervised and controlled, can make a tremendous difference in the marketplace. One political party decided it was in its best interest to portray the Solyndra error as a mistake; it wasn’t. The result is that the one political party forced us as a nation to concede research and development of solar power to countries like China.
As for banning the issuance of new leases for oil drilling on federal lands, that decision makes no difference at all. Most federal leases already in existence are good for 20 years and can be renewed. As one commenter pointed out recently, so 20,000 permits to drill already have been issued. My own research indicated that 10,000 if those permits allow for drilling on federal lands. The other 10,000 permits must be for drilling on private lands. Permits are generally good for five years and can be renewed. If most current drilling rigs are “horizontal”, not “vertical”, then there might not be a need for any new federal leases to be issued. Horizontal rotary oil drilling rigs can use an already existing vertical well, which is why most currently operational drilling rigs are located in the Permian Basin, in West Texas. The first Permian Basin oil well began producing in 1921. Thousands of wells have since been drilled. Pipelines to transport the crude oil to refineries crisscross the West Texas desert. I view the leasing issue as political theater, nothing more; it means nothing to the American energy companies, which will always drill in the most profitable manner possible. Why drill in a remote area of northern New Mexico that has little to no infrastructure when you can drill in West Texas and transport the crude oil directly to a refinery via an already existing pipeline?
I am not saying that Justsayin is wrong. Rather, I assert that he is far less right than he could be. Direct government investment in solar research and factories 10 years ago could have made a tremendous difference today. Just ask Bridgestone, Honda, Kawasaki, Suzuki and Yamaha engineers and employees.
Ray W. says
As a young adult, I became aware of WWII reports by American soldiers that the Japanese Army used Harley-Davidsons in their motorcycle transport and courier units. The Canadian doctoral candidate wrote about the Japanese government purchasing an entire Harley-Davidson factory in the early 1930’s and hiring a senior management engineer to arrange for the factory to be boxed up and shipped to Japan to build motorcycles for the Army. The American engineer set up a parts distribution network, adequate warehousing, and supervised the manufacturing facility for a number of years. Some of the motorcycles were sold under licensing laws as Harley-Davidsons to Japanese civilians before the war. There is a mystique among young Japanese motorcycle enthusiasts for the venerable Harleys. Under Japanese law, as I understand it, a very rigorous licensing process exists to ensure that only the most physically able are licensed to operate the old Harleys. One facet of the testing process is to actually pick up a tipped over Harley, without outside assistance.
Local says
No problem….pass it on to the consumer and find cheap labor….. they’re coming across the border every day. I’ve never hire an illegal immigrant but I am looking now .
HayRide says
Ya and that US1 gasstation is well maintained and clean too
Sam Thompson says
The price of gas is $0.20/gallon in Iran, $1.30 in Kuwait, and $ 1.50 in Nigeria. It does not matter what the price of gas is in Europe. If you are energy independent, you are not subject to the whims of OPEC. Joe Biden destroyed US energy independence.
FlaglerLive says
“Energy independence” has little to do with it. The United States is currently the world’s leading oil producer, at nearly 12 million barrels per day. In 1994 gas was selling at $1 a gallon, yet the US was producing just a little more than half what it’s producing now. The difference is market prices. We pay market prices in this country. Kuwait and Iran subsidize gas to the hilt, to prevent unrest. Even if the US were to produce more oil than it consumes starting today, prices would not be any different. The prices are not set in the United States but collectively by the market–Adam Smith’s invisible hand that market conservatives fetishize. Can’t have it both ways: if you want free markets, you have to abide by their costs and not make up stories about “energy independence” or presidents who have next to nothing to do with the price of oil.
Lou says
Like you said we have enough oil, we are energy independent, WE DON’T HAVE REFINING CAPACITY!!!!! to turn crude into gasoline. Investors failed to invest in refineries.
Ray W. says
Sam Thompson is conflating two different energy concepts: Energy independence and next energy exporter. America has not been energy independent for about 70 years. A few years ago, America became a net energy exporter. America now exports both liquified natural gas (via specialized ocean-going tankers) and compressed natural gas (via pipeline to Canada and Mexico). America exports electricity to Canada and Mexico where needed. America imports electricity and compressed natural gas, too, from both Mexico and Canada, where needed.
Since the late 1970’s, America has consumed roughly 19 million barrels of crude oil distillates and derivatives each day (gasoline, kerosene, diesel fuel, jet fuel, plastics, light and heavy greases, engine oils and a myriad of other products). Over the following decades, with improvements in efficiencies, America still consumes roughly 19 million barrels of crude oil distillates and derivatives each day, even though far more drivers hit the roads each day. In the late 1970’s, America pumped just under 10 million barrels of crude oil per day. This is why it was such a shock to the America public when OPEC cut off oil to the U.S. twice in the 1970’s; we just were not energy independent. By the time President Bush (W) left office in 2008, American crude oil production has dropped to just over 5 million barrels of crude oil per day. The idea that we were energy independent when we consumed nearly 20 million barrels of crude oil distillates and derivatives when we were pumping out 5 million barrels per day is absurd. During the Obama administration, crude oil production peaked at just under 10 million barrels per day (an 88% rise from the end of W’s administration), but we were still far from being energy independent. Natural gas production rose significantly, too, but not enough to make us energy independent. At one time during the Obama administration, in December 2011, over 2000 crude oil and natural gas rotary well drilling rigs were in use in American oil fields. During the Trump years, the number of rigs peaked at 1065 in January 2019. Right now, 727 rigs are in use, passing the number of rigs in use just before the pandemic hit early in 2020. Clearly, the Obama administration presided over a dramatic increase in oil and natural gas production, making Obama the most prolific energy president since the Nixon administration. Trump was number tw0. Biden appears to be third, but who knows what will happen should the Russia-Ukraine War settle into a stalemate. Remember, in February 2021, OPEC voted to cut crude oil production by 6 million barrels per day, in an effort to drive up crude oil prices. In July of that year, OPEC voted to increase production each month by 400,000 barrels per day. That means OPEC is still 2 million barrels short of its pre-vote total production. OPEC did this to make money for its members. Blaming OPEC’s decision on Biden is simply stupid. Sam Thompson’s comment brings the old legal saying to mind: There are four stages to a lawyer’s career. 1. The student leaves law school as an unconsciously ineffective lawyer; he just doesn’t know how little he knows. Then, the lawyer becomes consciously ineffective; he realizes how little he knows. Then, the lawyer becomes consciously effective; he has to work at it, but he is becoming effective. Finally, the lawyer becomes unconsciously effective; he doesn’t have to even think about being effective. Sam Thompson presents as an unconsciously ineffective commenter; he just doesn’t know how little he knows.
About half of the current drilling rigs in use are located in the Permian Basin, in West Texas. The vast majority of those rigs are horizontal drilling rigs, not the vertical type of rig. The obvious reason for the use of horizontal rigs is that it is cheaper to use an old well and drill new horizontal bores using the old well shaft. In the Permian Basin, many vertical wells are over a mile deep. It is expensive to drill a new vertical well a mile deep and then drill horizontally when the rig reaches the oil-bearing rock. Imagine the hub of a bicycle wheel as the vertical well. The spokes are the horizontal bores. Once crude oil production from the well drops off, a horizontal rig can be used to drill new horizontal spokes out a mile or more in every direction and the new bores can be fracked to release additional oil. Once that production drops off, new spokes can be drilled and fracked, all using the same vertical bore. The Permian Basin has been producing oil for about a century. A pipeline network taking crude oil from the wells to refineries already exists, so shipping the oil by truck or train isn’t necessary, providing additional savings to energy producers. Using an already existing oil well to horizontally drill means that the number of permits to drill is a misleading statistic, though it does make for good political theater. Why drill a brand-new vertical well in the ANWAR in remote arctic Alaska when you have thousands of existing vertical wells to choose from in Texas. Again, meaningless political theater. Removing ANWAR from leasing options means nothing to American energy producers. Very few vertical rigs are in use today, so permits do not reflect the actual current oil rig activity from horizontal drilling rigs. Again, political theater without substance.
A recent prediction has American oil production expected to rise approximately 1 million barrels of crude oil per day from levels existing just before the Russian invasion of The Ukraine, approaching the best numbers under Trump. Still, producing 12 million barrels of crude oil per day leaves us far short of the 19 or so million barrels we need to be independent.
Sam Thompson needs to exercise a bit more intellectual rigor. Of course, I fall short, too, from time to time, but I hope I never miss the mark as badly as Sam Thompson does in his comment.
Pogo says
@Ray W.
Thank you for sorting the shit from the Shinola. Do you think sam t knows anything about this?
Q Why do we import Russian (and other foreign) oil when we have a lot of it in the U.S.?
A Read on.
Why do we import Russian (and other foreign) oil when we have a lot of it in the U.S.?
Andy Uhler
“There’s been a lot of discussion about the fact that the United States imports Russian oil — and a pretty good amount of it.
Now, you could be excused for asking yourself: “Wait a second, I thought the U.S. had a bunch of oil in the Permian Basin in Texas and the Bakken Shale in North Dakota. Why the heck are we importing oil?” Turns out the answer is part chemistry and part economics.
When oil refiners talk about crude, they generally ask two questions. First: How easy is it to break up the hydrocarbons to produce, say, gasoline or jet fuel? (In oil speak: How light is it?) Second: How much sulfur is in the oil? If there isn’t much, it’s called sweet crude.
“Higher sulfur content, more sour crudes actually are cheaper to purchase,” said Hugh Daigle, associate professor of petroleum engineering at the University of Texas at Austin.
That’s because they take longer to process and need specialized refining equipment. This cheap, lower-quality crude comes from Canada, Venezuela and Russia, among other spots. Back in the late 1990s and early 2000s, it was the product U.S. refiners were buying.
“A lot of refineries, especially in the Gulf Coast, made a very expensive bet to invest in this equipment that would allow them to save money on input costs by processing, you know, lower-quality crude,” said Richard Sweeney, an assistant professor of economics at Boston College.
Then came the fracking boom. Fracking produces light, sweet crude that can’t be refined with that equipment.
“And it’s just like the economics of that bet turned out, ex-post, to be really bad,” Sweeney said.
Even though a lot of that light sweet crude is coming from Texas, where the refineries are, the U.S. imports foreign oil in order to make use of the existing infrastructure…”
https://www.marketplace.org/2022/03/07/why-do-we-import-russian-oil-when-theres-lot-u-s/
Ray W. says
Good point, Pogo. Thank you. If we continue to increase our domestic crude oil production, the light, sweet crude oil can be exported to foreign refineries. The refined products can be shipped back to us, as we have the infrastructure to import those products.
In the 1970’s, Congress reacted to OPEC’s embargoes and enacted a statute prohibiting the export of U.S. crude oil. About three or four years ago, Congress repealed the statute, and we began exporting crude oil again. Such is life in an international marketplace.
Lou says
Stop adding to the confusion.
We don’t use crude oil for our cars.
We are using product which are refined from crude.
We have refinery problems and not crude oil problem.
Ray W. says
Since I have long known that the last U.S. refinery was built in the 1970’s (1976 – I had to look it up), Lou’s comment struck me as missing the mark. As an aside, a brand-new micro refinery is being constructed in North Dakota. I first read about permits to build it being issued in 2016. The reason given in the 2016 article was that so many North Dakota oil wells had been drilled during the Obama years that a regional shortage of diesel fuel had developed. At that time, diesel fuel was being shipped by train from Texas to North Dakota to provide enough fuel for truckers to drive to the well sites, pick up the crude oil and transport it to a rail head. I found an article dating from last year detailing a contract to supply gasoline and diesel fuel between the owner of the s00n-to-be-completed refinery and a distributor.
According to the EIA, a site that tracks energy issues worldwide, the U.S. currently consumes 8.8 million barrels of gasoline per day, on average. From a link, I found statistics on U.S. imports of gasoline for the last 20 years. In 2005, we imported 219,000,000 barrels of gasoline. In 2021, we imported 39,600,000 barrels of gasoline. At 8.8 million barrels of gasoline consumed per day, last year we imported about 4.5 days’ worth of gasoline. It strikes me that we have sufficient refinery capacity to meet the vast majority of our gasoline needs. I did some more digging and found out that we commonly export gasoline in the wintertime, when demand is relatively low and import gasoline in the summertime, when demand is relatively high.
I went to another link on the EIA site and found out that last year we imported gasoline from:
Argentina, the Bahamas, Belarus, Belgium, Brazile, Canada, Chile, Denmark, Finland, France, Georgia, Germany, India, Ireland, Italy, South Korea, Lithuania, the Netherlands, Nigeria, Norway, Poland, Portugal, Russia, Saudi Arabia, Spain, Sweden, Taiwan, Turkey, the U.K., and the Virgin Islands.
I think it reasonable to conclude that if a refinery in Belarus produces an excess amount of gasoline compared to national demand, that refinery owner will sell gasoline to the highest bidder. We have been the highest bidder for excess Belarussian gasoline on at least one occasion in 2021.
As I have long commented, crude oil is an international commodity. It seems gasoline is an international commodity, too. This significantly weakens Lou’s point. Of course, since many European democracies are planning to cut off imports of Russian crude oil and gasoline, along with natural gas, worldwide demand for gasoline from refineries located in other countries will spike. This, too, will affect gasoline prices everywhere in the world, but Russia invaded the Ukraine, so any blame on this point goes to Putin.
Another aside relates to the ever-increasing demand for electric vehicles. I just don’t see any American energy company investing huge sums into building a large refinery in Texas, where the infrastructure exists to supply the refinery and distribute the refined products, when the long-term prognosis is that gasoline demand will drop, not increase. Building a new large-scale refinery that could be expected to last 50 or 60 years just doesn’t make sense if we are not going to be building very many, if any, gasoline-powered vehicles in the long-term. In 2021, 65% of all motor vehicles sold in Norway were EV’s. Years ago, Norway adopted a law ending sales of gasoline-powered vehicles by 2025. I researched that issue, too, and it seems that U.S. demand for gasoline has been dropping in recent years. A number of refineries have been shuttered in recent years because of the decreasing demand for refined fuels. Indeed, I recall an in-depth Washington Post article from about a decade ago about a refinery in Philadelphia that was about to be shuttered. With increased oil and natural gas supplies becoming available in the old Pennsylvania fields due to the new fracking compounds, a deal was struck with the city and the local unions to keep the refinery open. A fast-track rail line was to be built to speed delivery of crude oil to the site and the old refinery was to be upgraded to use natural gas to provide electricity to power the refinery, instead of coal. A fertilizer factory was planned, as making fertilizer is an energy-intensive process. The refinery was converted and in operation until it exploded in 2019. One month later, the owner filed for bankruptcy. In December, 2o21, a refinery in Baytown, Texas, exploded. While it is still operating, ExxonMobil has announced that it plans to close the facility, built in 1918, rather than spend the money to upgrade it.
I have to conclude that Lou’s premise is right, but only barely so. Since American energy companies have been shuttering refineries for years, due to decreasing demand, the issue is not new. Gasoline was readily available early in 2021 at around $2.50 per gallon and crude oil futures were at or around $35 per barrel, despite the closure of so many refineries. OPEC cut crude oil production and there has been a steady rise in crude oil prices ever since, with a corresponding rise in gasoline prices since that cut. Then, Russia invaded the Ukraine and gasoline prices spiked. Lou’s point, being less good that just about any other good point on this issue, must give way to those better points, because his point doesn’t explain the recent rise in gasoline prices. I do like his bringing the point to light and thank him for doing so. His point works best if gasoline were a national commodity; it is not. Crude oil, or the lack thereof, is by far the most significant problem in the recent rise in gasoline prices.
Since I have been researching energy issues for decades, I recall articles from the 80’s describing the environmental laws that made building new refineries in the U.S. prohibitively expensive. American energy companies back then were building refineries in other countries to skirt environmental laws and rules and building the infrastructure here to import and distribute the gasoline. One of the major refineries that an American energy company built was in Venezuela. Gasoline tankers crisscrossed the Gulf between Venezuela and New Orleans. With the current political differences between the American and Venezuelan governments, we don’t import gasoline from that site anymore.
Don't drink the Water says
Perhaps the planet can just shrink its population by about 5 Billion. We have enough confiscated Fentanyl from the southern border now to wipe out 1/4 of the USA. Gee, I sure hope no NUT JOB comes up with the idea of poisoning our water supply.