BP shut down 8 percent of American oil production after finding severe corrosion in its Alaskan pipelines. Of course, this means you’ll be paying more for gasoline until the pipeline is fixed.
Gas prices are probably going to rise 3-5 cents a gallon, said Tom Kloza, chief oil analyst at Oil Price Information Service.
The average price of a gallon currently stands at a near record $3.036.
Oil analyst Peter Beutel, president of Cameron Hanover, said shutting down an oil field is an expensive and risky step that is only taken in extreme circumstances. He said that suggests the 400,000 barrels a day produced in Prudhoe Bay could be shut off for some time to come.
Beutel said the shutdown is significant for markets because it was the one supply of oil that traders did not believe to be at risk from either geopolitical events, such as fighting in the Middle East, or hurricanes that threaten U.S. production in the Gulf of Mexico.
In trading Monday, U.S. light crude futures surged $1.54 to $76.30 a barrel on the New York Mercantile Exchange. (Source: CNN)
It’s pretty amazing that just 10 years ago a barrel of crude was $20. On the bright side, I’m seeing more and more hybrid cars on the road.
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7 Comments
I read today that the oil supply to the u.s. won’t be affected by this. But high prices will result from high anxiety over the market. Well take a xanax then. It’s such bull. Everytime something happens that could potentially be bad for oil supplies, prices go up more than they should because the powers that be can hide behind the world situation.
http://www.dailykos.com/storyonly/2006/8/7/124156/3296
You’re right. Oil supply should actually have to change before we are hurt at the pump.
The current system definitely seems broken.
appreciate the trackback and the airing of other views. be careful quoting kloza, tom know good and well that a change in the spot market for crude cannot affect gasoline prices tomorrow. he also knows that prices are going up right now due to other market factors and is making an ‘easy’ prediction to look erudite.
this really has very little impact on overall world crude supplies and thus very little impact on worldwide price of crude. like any bad news it will initially jitter the market.
that being said the price of gasoline is going to continue to go up and up. the fact is the demand curve is changing radically due to the tremendous growth in india and china.
those are the realy ‘culprits’ if you will. not w, not opec, not ‘big oil,’ but a bunch of chinese that want to drive the same cars we do.
i take it from your post you might be a bit ‘green.’ you should be happy about the rising price of gas. it will only serve to drive innovation into alternate energy sources and move people to public transportation.
[quote comment="463"]those are the realy ‘culprits’ if you will. not w, not opec, not ‘big oil,’ but a bunch of chinese that want to drive the same cars we do.
i take it from your post you might be a bit ‘green.’ you should be happy about the rising price of gas. it will only serve to drive innovation into alternate energy sources and move people to public transportation.[/quote]
I blame big oil partially for the rise in prices, but I know the demand from China and India is a huge factor.
With that said, I do blame big oil, the U.S. gov’t and Detroit for the fact that this country has not moved towards being more “green.”
Big oil pays politicians => politicians pass laws that are kind to gas guzzling SUVs => Detroit has no reason to make more efficient cars => we get screwed.
Thanks for coming by and commenting. I appreciate it.
eh, we probably disagree to the extent that ‘gaz-guzzling suv’s’ are really that bad, but if you are looking for someone to blame it is really the consumer.
they get what they want as long as they are willing to pay the price. its a prniciple that despite billions of dollars spent to contradict it has made a lot of people in colombia very wealthy.
“It’s big oil’s fault”… hmmm. Well, what exactly would you have a *business* do? They’re not even driving up the prices. They’re just going along for the ride. And they don’t pump all that oil out of the ground for their health ya know…
You have a problem with it, take it up with our government full of Jim Blacks and Randy “Duke” Cunninghams. Most of them should probably be behind bars on straight up illegalities — all of them if you throw in just shady stuff like betraying the American people for special interests like you’re claiming with the oil companies.
Now, if only they would deliver on those “blood for oil” cries, I’d probably vote Democratic this Novemeber. Goodness knows the Republicans haven’t had the balls to do it…
I agree, corporations are created to make money. But that does not absolve them from any moral responsibility.
Now take big oil companies. They are practically in a cartel situation where there is hardly any competition. Despite being in this situation they don\’t face strict regulation, but tax breaks.
It doesn\’t sound right to me.