• 10 hours Oil Pares Gains After API Reports Surprise Crude Inventory Build
  • 11 hours Elon Musk Won’t Get Paid Unless Tesla Does “Extraordinarily Well”
  • 11 hours U.S. Regulators Keep Keystone Capacity Capped At 80 Percent
  • 12 hours Trump Signs Off On 30 Percent Tariff On Imported Solar Equipment
  • 14 hours Russian Funds May Invest In Aramco’s IPO To Boost Oil Ties
  • 15 hours IMF Raises Saudi Arabia Growth Outlook On Higher Oil Prices
  • 16 hours China Is World’s Number-2 In LNG Imports
  • 1 day EIA Weekly Inventory Data Due Wednesday, Despite Govt. Shutdown
  • 1 day Oklahoma Rig Explodes, Leaving Five Missing
  • 1 day Lloyd’s Sees No Room For Coal In New Investment Strategy
  • 2 days Gunmen Kidnap Nigerian Oil Workers In Oil-Rich Delta Area
  • 2 days Libya’s NOC Restarts Oil Fields
  • 2 days US Orion To Develop Gas Field In Iraq
  • 4 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 4 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 4 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 4 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 5 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 5 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 5 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 5 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 5 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 5 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 5 days Venezuelan Output Drops To 28-Year Low In 2017
  • 5 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 6 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 6 days Kinder Morgan Delays Trans Mountain Launch Again
  • 6 days Shell Inks Another Solar Deal
  • 6 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 6 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 6 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 6 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 7 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 7 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 7 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 7 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 7 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 7 days Norway Grants Record 75 New Offshore Exploration Leases
  • 7 days China’s Growing Appetite For Renewables
  • 7 days Chevron To Resume Drilling In Kurdistan
Alt Text

New Importers Keep LNG Markets Tight

While increased LNG demand from…

Alt Text

Will 1 Billion EVs Crash Gasoline Demand?

Electric vehicle sales are picking…

Alt Text

Gas Wars: The First Energy Conflict In 2018

Territorial disputes over newly discovered…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Gasoline is Expensive - Deal with it

Gasoline is Expensive - Deal with it

The White House announced it was getting into the commodities game in an effort to protect consumers from some of the geopolitical factors spilling over into the retail gasoline market. OPEC and the IEA both said in their monthly reports that market perceptions were behind higher energy prices, not physical shortages. With most U.S. consumers still economically gun shy, gasoline consumption is down amid high retail prices. But on the business side, protection against potential oil shocks in the long-term could help push a reinvigorated U.S. economy over the recessionary hump. Apart from the murky waters of economic nuance, however, President Obama said that, no matter what, American commuters need gasoline. Speculation aside, maybe that's the problem.

High gasoline prices make for angry constituents. That means politicians, especially politicians fighting to keep their paychecks, start pointing their legislative guns at Wall Street almost as soon as the gavel strikes. Market indices don't particularly care one way or the other if consumers and lawmakers are frustrated, but they are concerned nonetheless. U.S. lawmakers in March complained to the Commodity Futures Trading Commission that nobody was watching energy markets closely because perceptions are trumping real-world scenarios. Demand is down and supplies are up, which typically means prices drop. But not so fast, the critics say. Someone must be cheating.

Energy wonks note, correctly, that hedging your energy bets is a good way to protect against future shocks. Imagine how much plane tickets would cost if the airline industry practiced a just-in-time policy for its fuel needs. The same would likely hold for refineries and oil producers. But that doesn't mean much for the average consumer when gasoline prices can increase as much as 10 percent overnight because Iran's Press TV ran a false report about a Saudi pipeline explosion, or U.S. refineries closed for maintenance or the weather suddenly turned colder or any of the other reasons cited for volatility in consumer gasoline prices.

It's getting close to the so-called driving season in the United States when Americans take to the road for their summer vacations. But gasoline demand is down more than 3 percent compared with the same period last year. That may be because of improved fuel economy, a lack of general consumer spending or because of sluggish employment numbers means nobody has a job or vacation to drive to anyhow. Yet, the government said gasoline prices are starting to come down. But no matter. U.S. lawmakers, including the president, made a big show of their rhetoric on gasoline, jobs, energy security, American families and the like.

"Obviously rising gas prices means a rough ride for a lot of families," said Obama. "Whether you’re trying to get to school, trying to get to work, do some grocery shopping, you have to be able to fill up that gas tank."

And therein lies the problem. Most commuters go to school, get to work and run errands using a vehicle that runs on gasoline. Gasoline is a necessity and that's in part why the debate ensues. Without massive subsidies, gasoline is going to get more expensive no matter what the politicians say. And until commuters move beyond the carbon mindset, that ride to work will continue to be a rough one.

By. Daniel J. Graeber of OilPrice.com




Back to homepage


Leave a comment
  • Hans on April 19 2012 said:
    Excellent article, Mr Graeber!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News