By on February 2, 2015

Anacortes_Refinery_31911

Enjoying sub-$2/gallon prices at the pump? Those fuel prices will make their slow climb back up above $2 beginning later this month.

GasBuddy says that while oil prices have fallen, the wholesale prices for refined products, such as gasoline, are on the rise. Underutilization of capacity at the refinery is leading to a surplus of oil, which means less gasoline et al to distribute.

Another contributing factor to the increase in price at the pump is the annual changeover to summer-blend gasoline, whose cleanliness comes at a higher cost. Consumer demand and refinery maintenance will help push up pricing, as well.

The increase is expected to crest between April and May, likely to remain above $2/gallon for some time to come. The current average is holding at $2.04/gallon, per AAA.

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28 Comments on “Fuel Prices To Climb Above $2/Gal Beginning Mid-February...”


  • avatar
    JimC2

    Time to buy up some Priuses/Prii and flip them in a few months!

    No, not really, just a comment on the whims of the market and month-to-month changes in the cost of fuel.

  • avatar
    DeadWeight

    When gas hits national average of $2.55/gallon, 55% of those buying large SUVs & Trucks getting less than 19mpg mixed start feeling pain.

    When gas hits national average of $3.20/gallon, 55% of those buying large SUVs & Trucks getting less than 19mpg mixed start having acid reflux at gas station pump. 1/2 of this 55% begins to deeply regret buying that pickup, and even more so, large SUV.

    When gas hits national average of $3.85/gallon, 55% of those buying large SUVs & Trucks getting less than 19mpg mixed start considering selling their trucks, and more so, large SUVs. 1/3 of this 55% has either sold/traded in or has listed for sale or is about to trade in their truck, or more likely, large SUV.

    At $4 national average gasoline, the floodgates of the 1/3 price purchased new, 3 year old 25,000 – 35,000 mile trucks, and more likely, large SUVs flood the market – HELLO 22k 2014 Yukons, 28k Escalades, 23k Navigators, etc.

    • 0 avatar
      JimC2

      So what you’re really saying is that, for hybrid fanbois, last week was a great time to get a deal on a 3 year old car.

    • 0 avatar
      tresmonos

      Considering I spend the cost differential between 3.85 and 2.55 / gallon in a year’s worth of F150 fuel consumption after going out to drink for 7 weekends, my acid reflux will remain in check.

      Average consumers r so dumb

      • 0 avatar
        DeadWeight

        I have a $3,900 Nissan Sentra w/87,000 miles in moth balls from the last time this happened, and will trade it straight up for a 2012 to 2013 Yukon w/35,000 miles in about 3 months.

        I will then trade the Yukon in straight up for a mint 2006 Lexus LS430 with less than 70,000 miles.

      • 0 avatar
        ClutchCarGo

        Yes, I fully expect to see my local news send a reporter to the gas station for consumer reactions about how painful the rise from $2 to $2.50 is, and how much it affects their lives. The human brain just can’t make good sense of numbers.

        • 0 avatar
          CoreyDL

          90% odds the interviewee will be:

          Woman
          Middle aged or younger
          Driving old crappy Grand Cherokee V8
          Car seat in back

          “Oh gas prices don’t affect me, I always just buy $10!” *grin*

    • 0 avatar
      JK43123

      A local TV station was at a car dealer interviewing buffoons saying ” oh we’re buying a whompin’ big truck now that gas prices have come down. “. Are you really that effing stupid??

      John

    • 0 avatar
      Japanese Buick

      You would think that would happen @deadweight but you would be wrong.

      Last time gas prices spiked to the $4 range I thought it would be a good time buy a used gas guzzling pickup cheap. I have a hobby farm and only drive trucks about 1-3k miles a year, so cheap to buy/expensive to run was just the ticket for me. But it wasn’t the buying opportunity I expected. I literally looked for I thought would be a decent priced truck, then gave up and bought a used Tacoma, after which the inexpensive big truck I was looking for fell into my lap courtesy of a friend of a friend who had changed jobs an no longer needed a truck. The owners of those trucks love them and don’t sell them when gas gets expensive.

      The used truck market in my experience has two major parts:

      1. Loaded-up pickup trucks with way more equipment and luxuries than I am willing to pay for in a truck that I am buying for hauling hay, my trailer, or dump runs, going for way more than I want to spend.

      2. Rust buckets I wouldn’t pay $1 for.

      The sweet spot in between is very hard to hit.

      • 0 avatar
        highdesertcat

        “The owners of those trucks love them and don’t sell them when gas gets expensive.”

        Most people don’t care about the price of gas. And people who have to worry about the cost of gas oughtn’t buy a truck.

        BTW, the cost of a rust-free old truck in the Southwest is mind boggling. I sold a 2006 F150 XLT SuperCab for $10K in Jan 2011. I also sold a 1988 Silverado 350 Ext Cab Long Bed for $6500 in Jan 2011, after I had bought my 2011 Tundra.

  • avatar
    PrincipalDan

    Yes economics are cyclical with commodities being a big part of that.

    Film at 11.

  • avatar
    Hummer

    This was expected.
    Question, what is with articles from many sites using pictures of power plants that have steam coming out of the coolers? Actually I know the answer to that, to cater to the greenies that believe it’s the devil himself escaping.

    This new Ram fascination I’ve developed had turned from the $21k 5.7 half tons to looking at a $40k tradesman 4 door PowerWagon with the 6.4, I’m sure I can get it to 37k or so. Plus it would save quite a bit on fuel making me a true greenie convert myself.

  • avatar
    Lorenzo

    Several states with high total gas taxes (state, federal, excise, sales) never saw sub-2-dollar gas. The states of California, New York, Hawaii and Connecticut should stay under $3/gallon, and that’s still a bargain compared to their previous experience of $4-$5 gas.

    The price of crude isn’t likely to rise any time soon, but the bottleneck in fuel supply that will cause higher prices at the pump will become apparent. It’s due to past lack of new refinery construction and the high taxes and regulation of existing refineries. Unlike the discovery and drilling for crude, the refinery side hasn’t benefited from new technology.

    • 0 avatar
      highdesertcat

      The bottleneck to the refineries as well. The railroad tanker cars filled with oil in the desert are still parked out there. And the ocean-going crude-carriying oil tanker ships are still parked in the Gulf, and off the US West Coast and the coasts off Asia.

      All waiting for a rise in the price of oil…..

  • avatar
    Fred

    They have gone up a couple of cents already aournd here, especially premium and diesel.

  • avatar
    STRATOS

    Most of the refineries are owned by integrated oil companies.It is logical,the profits they cannot make on the production side,they will make on the retail part of the business.They just need to create a shortage somehow,since even the low price is not moving the product.

  • avatar
    28-Cars-Later

    Just look at the RBOB futures. Before February hit the last price I saw was 1.36xx, March is currently trading at 1.52xx, and April at 1.74xx. Add any taxation and you have the base wholesale price, so look for a roughly fifty cent jump between now and April – because they can.

    http://www.cmegroup.com/trading/energy/refined-products/rbob-gasoline.html

  • avatar
    CoreyDL

    “Another contributing factor to the increase in price at the pump is the annual changeover to summer-blend gasoline, whose cleanliness comes at a higher cost.”

    I love this. Price goes up in summer because summer blend. Then we switch to winter blend in winter, and price goes up.

    “Summer blend costs more money and also winter blend costs more money.”

  • avatar
    Volt 230

    I already see a 10 cents jump from yesterday at local gas stations, funny thing is the gas in the tanks was bought at the lower price, what a rip-off all this gas business is. BTW the price of motor oil never went down 1 penny despite the drop in crude prices.

  • avatar
    jimbob457

    A strike has idled approximately 10% of US refining capacity, and the price of crude has evidently found a bottom at about $45-50 (this will likely put an end to extensive discounting of US crude). That plus seasonal factors look like they will cause gasoline prices to rebound a bit. Looks like a good couple of quarters for US refiners.

  • avatar
    NoGoYo

    It never went below $2 here anyway (current average is about $2.20) so I’ve got nothing to cry about.

  • avatar
    cackalacka

    Naturally, the only solution to this morass is to build a pipeline carrying concentrated low viscosity bitumen above the most fertile aquifers in the history of agriculture so some Canadian billionaires can get richer and the price of a gallon in Shanghai can come down a nickle.

    • 0 avatar
      Lorenzo

      There are questions about the well head price of fracked crude, but there’s no question the cost of extracting bitumen from tar sands is way higher than the current price. There are already pipelines to carry Bakken crude, but they’re at capacity.

      The attraction of Keystone was that the Canadians would pay for it, and Bakken crude could piggyback. Now it’s doubtful that Canadian interests will finance it, and low prices make it doubtful there’s financing for increased capacity of existing pipelines and/or special rail cars that can transport volatile Bakken crude safely. Neither is now economically viable.

  • avatar
    John

    All hail the prescient GasBuddy; which predicted sub $2.00 a gallon gas was coming, way back in early 2014.


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