Gas futures fall 8% on report of less driving

http://www.freep.com/article/20110512/BUSINESS07/105120480/Gas-futures-fall-8-report-less-driving

NEW YORK -- Gasoline futures tumbled almost 8% Wednesday after a government
report showed the strongest evidence yet that higher pump prices are forcing
Americans to drive less.
Oil also dropped back below the $100 mark.

The Energy Information Administration said that U.S. gasoline demand dropped
2.4% last week, the largest drop in seven consecutive weeks of declines.
Analysts said motorists are buying less gas with pump prices close to a
national average of $4 per gallon.

"That $4 number is not just having a psychological impact, but a direct
impact on drivers," energy consultant Jim Ritterbusch said. "Normally, with
the economy recovering, you'd expect gasoline demand to go up, but that's
not happening."

With Memorial Day less than three weeks away, analysts now expect that, at
most, motorists will use about as much gasoline this summer driving season
as they did in 2010.

"My opinion is that they started cutting back when prices hit $3.50" per
gallon, oil analyst Andrew Lipow said. "We haven't seen the full effect of
that just yet."

The national average for a gallon of regular reached $3.50 on March 6. It's
now at $3.96 after reaching $3.98 per gallon last week. Gas rose mostly
because of higher oil prices, but also because of refinery outages.

The EIA data showed that gasoline supplies increased by 1.3 million barrels
last week even with a decline in refining activity around the country.
Gasoline for June delivery plunged, losing 25.69 cents to settle at $3.1228
per gallon on the Nymex.

The CME Group, which owns the Nymex, suspended trading in energy contracts
for five minutes after the gasoline contract dropped by more than 25 cents.

Gas supplies typically decline in the spring as refineries purge their
stocks of winter fuels. This year, supplies fell more than expected as
fires, power outages and other problems temporarily knocked refineries out
of commission.

Gasoline futures had risen Tuesday on concerns that flooding could impact
some refineries along the lower Mississippi River, analysts said.

 

Oil prices began a steep descent about ten days ago yet I have not seen
ONE example of price drops at the pump.

Funny how when someone sneezes in the mideast, prices go up immediately.

Prices should be at least 25¢ per gallon less than they are...

JT

 

No, the refineries are converting to summer gasoline which
is much more expensive to make than winter gasoline.

Lynn

 

Supply/demand somethings don't change.

 

Gas is priced on what it costs to /replace/ it. Nobody wants to lower
prices too quickly for fear of the situation reversing itself when it comes
time to replenish supply.

Prices are exactly where they should be for the market conditions
prevailing.

 

That's one factor. Every year prices climb for a while during changeover,
and every year people whine about it.

 

But Gas prices haven't dropped a penny here.

Charles Grozny

 

Here in CT, they dropped 3¢ last Friday, but jumped 6¢ on Tuesday to a new
high this year. Present price $4.269

 

naivete is so /cute/!

 

i can't believe anyone buys that bullshit story. summer gasoline is
actually more expensive to make??? give me a break. that's like saying
white paint is more expensive to make.

reality is, we get charged more for "summer gasoline" because people
drive on vacation, and when they do, their price sensitivity is almost
zero. thus the oilco's are simply charging what they know they can get
away with. any "technical" justification is just so much smoke.

 

is anyone else old enough to remember the real gas shortages of the 70's
and the lines at the pump? do you remember how much prices hiked then?

here we are today, and there's no shortage of gas, yet we're standing
about with out thumbs up our asses, or more particularly, with the
oilco's suckers in our wallets, while these "refinery outages" are used
as excuses for market price manipulation when there is zero restriction
on supply. it's the same game enron used to play when they took power
plants offline to hike electricity prices in california. supply and
demand? my ass.

and pump prices here in northern california haven't dropped a single
cent. i smell some real backroom argument over the oilco's tax breaks
and the recent political theater surrounding them, with the oilco's
playing the "gouge" game to add spice to the stew.

 

And the rightwingnuts here scoffed at my suggestion that American
consumers can affect profits of the gouging oil companies. We have
the power to strike fear in the hearts of the corporate fascists.

 

Where in CT are you? I was in Warehouse Point, BroadBrook (both sections
of East Windsor) and Stanleyville, otherwise known as New Britski.

Gas was always higher in CT because of the taxes.
I used to go to Springfield and pay the higher prices at the stations near
Rt 91 because it was CHEAPER!

 

I can well remember those days. Anyone that owned a tanker barge was
renting them for high bucks to store fuel. Unused gas stations were
recommissioned as storage areas as the oil companies had no place to store
fuel.

Amazing part was that as soon as the prices went up the shortage ended the
very next day.

 

"When we get a car that can get two hundred miles per gallon, that
gallon will cost two hundred dollars." - William Heyman

 

I line in Putnam, but I work in Uxbridge MA. The difference is about 30¢ a
gallon. And they pump it for you in some stations.

 

THAT is one of the basic truths of human economy.

 

....as is people who can't trim posts.

 

BooHoo, you big e-baby

 

-stuff snipped-

I don't mind trimming posts, but I have also been critiqued for doing
so, because the reader wanted to see the previous posts and not have
to look them up. No good deed goes unpunished!