Skip to comments.Price of Gas in U.S. Rises as Refiners Export More to Other Countries
Posted on 04/22/2014 12:36:23 PM PDT by Theoria
Drivers in the U.S. are facing rising gasoline prices ahead of summer-vacation season, just as refiners here are shipping more gas to other countries.
A new pipeline, built to release a glut of crude oil that was stuck in the middle of the country, is now feeding oil to refineries on the Gulf Coast that churn out gasoline and diesel. While these fuels still make their way to the Southeast and the East Coast, growing amounts are being sold to Mexico, the Netherlands, Brazil and other countries.
The push into these markets has been spurred by the U.S. oil boom. Rising oil output had been flooding the nation's oil market in recent years, keeping U.S. crude prices low relative to world prices. Facing tepid fuel demand in the U.S., refiners have been ramping up exports, creating more global competition for U.S.-produced fuel.
While the construction of pipelines and other transportation infrastructure allows other countries to benefit from the oil boom, it also means the market for motor fuels has become more competitive. The gasoline market now has to reckon with demand from other countriesand the potential impact on pricesduring a U.S. economic recovery many economists see as fragile.
"Quite frankly, this is not just a U.S.-centric topic anymore," said Nancy White, a spokeswoman for motor club AAA. "Production is going overseas, so that impacts the supply here, and that will drive prices up."
Gasoline stockpiles nationwide are at their lowest point for this time of year since 2011, according to the U.S. Energy Information Administration. Meantime, the retail price for a gallon of regular gasoline averaged $3.68 on Monday, up 4.2% from a year ago, according to the EIA. That is the highest price since March 2013. AAA had the average price on Monday at $3.67.
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They have as much allegiance to the U.S. as does Obama.
I read somewhere that America is now producing more crude than we have the ability to efficiently refine. We haven’t built new refineries a few decades now.
I don’t know if that factors into the equation or not. But if true, it would seem logical to assume that having the resource without being able to bring it to market does not affect the demand as much as we need to bring down the price.
We ought to boycott the basta$ds.Let them drink the gasoline.
Caliph Baraq is pleased.
The goal of progressives is to get us out of those d@mn personal cars and into easily manipulated mass transit.
Less driving >>> Gaia smiles.....
One would have assummed post 9/11 that part of the defense strategy would have been to create more refineries just because of the threat of unstability in the ME and of other concerns with oil production. But, I’m not shocked at that. It took several years before we[the prez] would evern lift the executive ban on off shore drilling[Still a federal ban, me thinks].
“We havent built new refineries a few decades now.”
Not quite true and US refining capacity has increase over the last few decades.
‘”They have as much allegiance to the U.S. as does Obama. “
Okay, you are now president of a publically owned Americo Gas corporation. You can sell your product in the domestic market for $x/gallon. Or, you can sell your product into the foreign market for 1.Y*($x/gallon). Now, who do you actually work for? The answer is the shareholders. So, do you tell the shareholders, “Hey, I could have made more money for you, but I’m patriotic.”? I don’t think you’d work there much longer.
Also, producing gas for the domestic market is probably much more expensive. You have to meet all kinds of standards that you do not have to meet for the foreign market, making the cost end of your cost/profit equation that much better for the stockholder.
In addition, if you saturate the local market, yes it does drive down prices. That means you make even less on the gas because you sent it here.
We have done dumber things but that list is kinda short.
How about we sell what we need HERE cheap, then ship the rest and let the other countries figure out how to drill and refine on THEIR own dime?
I think the oil companies have an allegiance to their stock holders to sell their product in a manner at at a price that will be most profitable.
So if you owned an oil property here in the US, you'd be willing to take below market prices for the crude oil or methane?
Good post and demonstrates that you have an understanding of the Free Market.
But not a peep from the public. Why? The media hasn’t told them that they should be upset about this.
The American public deserves every bit of what is coming.
I have no problem with selling refined products to Mexico, as long as they are replenished by cheap Mexican Crude.
Selling refined products is a value added sort of enterprise. Let the rest of the world cough up cheap crude.
The Free Republic Free Trade Army will tell you this is a good thing. You should be happy that you participate in a gloBULL market, now shut up and buy a Prius and oh yeah, sell your boat.
Is the freakin almighty dollar so important that you'd place the country of your birth in jeopardy?
You traitor b@$t@rds!
I detest regulations. But in this case oil products coming from American soil need to sold within the nation, surplus sold outside. I suspect American producers are owned by foreign interests and need to be reigned in.
“How about we sell what we need HERE cheap....”
The great thing about America is that you are free to do that.
You could open the TLI Oil Company.
All you would need to do is find a spot where you think there could be oil, lease the land, spend maybe 20 to 50 million drilling a well, extract said oil from the ground, transport you oil to the refinery that you buy for a billion dollars and then transport your finished product to your market and sell it Here cheap at your TLI Gas Stations which will cost around two million dollars each.
There you go, getting all common sense on us all again. .
“I detest regulations. But in this case oil products coming from American soil need to sold within the nation, surplus sold outside. I suspect American producers are owned by foreign interests and need to be reigned in.”
How do you define “surplus?”
What about if we simply follow Free Market principles and not adopt the economic policies of Venezuela?
You don’t detest regulations. You detest free markets.
Would you be in favor of forcing a farmer in Iowa to sell corn in the US for $3 a bushel that he could sell on the world market for $5?
Do you realize that you are advocating the exact policy implemented by Hugo Chavez?
the oil industry claims it is all supply and demand - I don’t see it. The American public has been taking it on the chin from Washington, Wall Street and the oil industry.
I can’t help but think of all the countries who protect their own products and charge high duties for American goods.
I am not a one world guy. Take care of the US first, secondarily the rest of the world.
refiners here are shipping more gas to other countries.
They have as much allegiance to the U.S. as does Obama.
As a believer in free market capitalism, I think that it’s simply a matter of a business selling their product to willing buyers at market prices (all the while producing American jobs and wealth). Demand is down in the US thanks to Obama’s slow destruction of the American economy.
I suspect you’d have to look long and hard to find a Canadian (which has an economy that is outpacing the Obama-hindered American economy) who would say it would be “un-Canadian” for Canadian producers of crude to sell/export the crude to the United States.
If we say we believe in Freedom but begin to demonize folks who exercise that freedom we are slip-sliding away toward progressive beliefs.
You actually think this is a non-manipulated corruption free, free market?
These people would support our enemies if there was enough profit in it. Oh wait....That’s already happened!
“Take care of the US first, secondarily the rest of the world.”
The cool thing about a Free Market is that it does take care of the US first.
Could you please name one country that has implemented price controls on oil and then saw oil production increase and prices fall?
Sadly, I think it generally works the other way with the farmers.
In the case of sugar, I believe that you are being forced to buy sugar produced by American farmers, and are not allowed to buy sugar produced by foreigners.
This situation has led to many candy companies moving production to Canada or Mexico. The companies are allowed to import finished candy, but are not allowed to import the sugar to make the candy.
“All you would need to do is find a spot where you think there could be oil, lease the land, spend maybe 20 to 50 million drilling a well, extract said oil from the ground, transport you oil to the refinery that you buy for a billion dollars and then transport your finished product to your market and sell it Here cheap at your TLI Gas Stations which will cost around two million dollars each.”
That is a fine argument, just as long as your oil company isn’t pumping that oil off public lands.
In that case the public should have a say on exporting it.
Nobody is talking about nationalizing the oil companies, but if we keep getting hosed on gas prices you can bet your ass they will be!
Should the public have a say in how the cattle that are grazed on public lands are sold?
And then there won't be any gas. Just like Venezuela.
Actually with todays technology the situation is even more suspect.
Take a look at the profits by Exxon in the "slump" of late 2008 - early 2009.
Thirty five BILLION.
And the price of oil was in the mid 40s to mid 50s.
If we are the leading producing company on the planet can we not set the "international" price?
Whatever is "lost" by the producing companies in domestic pricing can be added to the "international" price.
That would provide motivation for other countries to drill and frack.
“...In the case of sugar, I believe that you are being forced to buy sugar produced by American farmers, and are not allowed to buy sugar produced by foreigners.
This situation has led to many candy companies moving production to Canada or Mexico. The companies are allowed to import finished candy, but are not allowed to import the sugar to make the candy.”
This is a perfect example of why we should let the free market reign—unhindered by ridiculous restrictions.
“Should the public have a say in how the cattle that are grazed on public lands are sold?”
Is there a beef shortage?
Is there an oil shortage?
Why do you advocate government price controls?
How about adding a hefty tariff against all oil products sold outside this nation? The money earned should then be earmarked to debt reduction. No earmarks.
There would be plenty of gas. US production is at all time highs.
It happens every time socialists try to nationalize something.
I didn’t say anything about price controls, just exports of oil off public land while we are being hosed on prices.
Sell it here for all the market will bear, no price controls.
So, even if Keystone is approved, even if we drill more oil, we’ll still be paying out the wazoo for fuel. We could still see shortages if fuel is exported for the highest price. Isn’t that what Stalin did in the 1930s with food? Why should we approve these things then? The left would use this as an argument that free markets don’t work.
Nationalization and price controls are socialist tools and ideas.
Who pays the tariff, the producer or buyer?
You and oliver are the only ones talking about price controls.