Friday, February 8, 2013
Higher Gas Prices?
We have all become accustomed to hearing the words, "expect gas prices to rise...". They are often plastered all over the news, articles, and newspapers. In a Marketwatch article by Myra Saefong, we begin to see her reasoning behind why she agrees. In one week, the average price per gallon of gasoline has jumped 17 cents, the highest weekly jump in two years. Also, during this time many refineries are typically switching to their summer blend which is more environmentally friendly. During this transition supply is temporarily cut, and the price is naturally driven upwards. Speculators and investors have anticipated this, which has already forced the price up. Price peaks for 2013 vary anywhere from about 3.70/gallon to over 4.00/gallon for high traffic areas. The only glimmer of good news for WTI (West Texas Intermediate) is that increased production of shale oil production in North Dakota and Texas should help with countering the volatility that is expected.
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3 comments:
This is just another reason we should be pushing to seed up the research process for alternatives to fuel. Gas is a limited natural resource and many people do not realize that as it has come to be something that most people use on a regular basis. We, as a country and in the world in general, have come to rely on gas too heavily and are affected too much by its changing prices and availability.
^ I agree. However, it's important to keep in mind that American consumers are privileged in terms of how much we pay for gas. What seems expensive to us is nothing compared to what most European consumers are paying due to the high tax rate. I wonder what would happen if our government tried to put in place similar taxes- would there be riots or an increased push for alternative solutions?
Natural gas is one solution. Natural gas used for transportation is up to 25% less than petroleum. According to the Northern Colorado Gazette, Weld County, Colorado received its first LNG truck in July 2012 and has already realized a 22 percent reduction in fuel costs, or $25,000 a year in fuel savings per truck. Clearly, there is significant value in using natural gas for transportation.
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