4/4/2008 3:30 PM by John Wilen,
AP Business WriterNEW YORK (AP) --
NEW YORK (AP) -- Retail gasoline prices surged to a record above $3.30 a gallon Friday and appear poised to rise further in coming weeks as gasoline supplies tighten.Oil prices, meanwhile, supported the gas price rally, jumping more than $2 a barrel after a dismal employment report sent the dollar lower. At the pump, gas prices rose 1.4 cents overnight to a national average of $3.303 a gallon, according to AAA and the Oil Price Information Service. That's the latest in a series of records, and about 60 cents higher than a year ago.While oil's surge above $100 a barrel the last month has boosted gasoline prices so far this year, analysts now expect gas prices to continue rising regardless of what direction crude takes. The Energy Department expects prices to peak near $3.50 a gallon later in the spring, but many analysts predict the spike could approach $4. That's because gasoline supplies are falling, in part because producers are cutting back production due to the high cost of crude the more expensive crude is, the more refiners have to pay and the lower their profit.
Egad! Perish the thought. Oil companies having to lower their profits? Such things are not allowed in this country. Actually, there are few more sentences that are pertinent to this subject and I'll add them below.
The margin between the price refiners pay for crude and what they get for selling the products they make from it is around $11 to $12 a barrel right now, according to the Oil Price Information Service. However, that margin has slipped into negative territory some days and is well below margins of $37 a barrel refiners earned last spring."
It's tough to slip into "negative territory" when last spring the refiners were suffering with margins of only $37 a barrel.
Actually, there's enough blame to be shared by most of the people in this country. The absence of a comprehensive national energy policy since the first "oil crisis" in the 70s is appalling. The tendency of many Americans to drive large gas guzzling cars has contributed to the consumption levels that have driven the price of oil so high. People will assert "it's my right to drive whatever car I can choose if I can afford it." I'm not aware of any "right" inherent in the Constitution of the United States, however it is currently their freedom to do so. As a result of the aforementioned factors, and a host of others not mentioned, we are beholden to countries that despise us and our way of life to supply us with the oil we need to continue our way of life.
Naturally, no national crisis goes untouched without Congress raising a ruckus about it. Doing something about it is another issue entirely.
Oil Industry Chiefs Tell Congress That Record Fuel Prices Are Not Their Fault
By H. JOSEF HEBERT 4/2/2008 2:57:00 AM
WASHINGTON - Don't blame us, oil industry chiefs told a skeptical Congress. Top executives of the country's five biggest oil companies said Tuesday they know record fuel prices are hurting people, but they argued it's not their fault and their huge profits are in line with other industries.Appearing before a House committee, the executives were pressed to explain why they should continue to get billions of dollars in tax breaks when they made $123 billion last year and motorists are paying record gasoline prices at the pump. "On April Fool's Day, the biggest joke of all is being played on American families by Big Oil," Rep. Edward Markey, D-Mass., said, aiming his remarks at the five executives sitting shoulder-to-shoulder in a congressional hearing room. "Our earnings, although high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements," said J.S. Simon, senior vice president of Exxon Mobil Corp., which made a record $40 billion last year."We depend on high earnings during the up cycle to sustain ... investment over the long term, including the down cycles," he continued. The up cycle has been going on too long, suggested Rep. Emanuel Cleaver, D-Mo. "The anger level is rising significantly. "Alluding to the fact that Congress often doesn't rate very high in opinion polls, Cleaver told the executives: "Your approval rating is lower than ours, and that means you're down low. "
I guess that says it all. If you can't get someone to do the right thing, insult them. In this case by telling them they're more unpopular than you are. What a way to go!
So until alternative sources of energy become sufficient to begin to displace the need for oil, the following equation will rule the day.