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    Oil settles above $105 a barrel, gas above $3.50

    Chris Kahn, Ap Energy Writer – Mon Mar 7, 3:19 pm ET

    NEW YORK – Oil prices continued to set new post-recession highs Monday as forces loyal to Moammar Gadhafi pounded rebels near a key oil port in Libya. It's unclear how long the country's oil exports will be cut off, and traders prepared for a worst-case scenario in which world supplies would be under pressure for months.

    Benchmark West Texas Intermediate crude for April delivery gained $1.02 to settle at $105.44 per barrel on the New York Mercantile Exchange. The price almost hit $107 per barrel earlier in electronic trading, the highest level since Sept. 26, 2008.

    In London, Brent crude fell 93 cents to settle at $115.04 per barrel.

    The rise in oil is driving U.S. gasoline prices to levels that weren't expected for at least another month. Pump prices have jumped an average of 39 cents per gallon since the Libyan uprising began in mid-February, forcing motorists to pay an additional $146 million per day for the same amount of fuel. The national average hit $3.509 per gallon on Monday, according to AAA, Wright Express and Oil Price Information Service.

    Libya, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Gadhafi after 41 years in power. Officials in the country say oil fields continue to operate, but daily exports of 1.5 million barrels could be cut off for some time.

    On Monday, Libyan warplanes launched more airstrikes on rebel positions around the Ras Lanouf oil port as forces loyal to Gadhafi tried to keep rebels from advancing on his stronghold in the capital, Tripoli.

    OPEC has ramped up production to make up for the loss of Libyan crude. The Financial Times reported Monday that Saudi Arabia, Kuwait, the United Arab Emirates, and Nigera are planning to put another 1 million barrels per day on the market.

    Also, the Obama administration is evaluating whether to tap U.S. strategic oil reserves to slow the rising price of oil. A White House spokesman said officials will base that decision on a variety of factors, including the flow of oil to the U.S.

    The government started to stockpile oil after the 1973 Arab embargo. The Strategic Petroleum Reserve, located in massive underground salt deposits in Texas and Louisiana, currently holds 727 million barrels of oil — enough to supply the nation for 37 days.

    Releasing additional supplies and ramping up production could temporarily cool off overheated energy markets, but experts warned that it also would put a tighter squeeze on the world's oil as the global economy recovers and consumption rises.

    "They'll remove the cushion of extra supplies," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. "Until this situation gets resolved, prices are going to continue to grind higher."

    It also doesn't make sense to tap into the U.S. reserves right now, analyst and trader Stephen Schork said. The supply problem exists mostly in Europe, where many refineries rely on Libyan crude. In contrast, U.S. refineries have access to a relatively large supply.

    The Energy Information Administration estimates OPEC can crank up production by another 4.7 million barrels per day. An extended shut down of Libya's exports would slice that capacity by about 32 percent to around 3.2 million barrels per day. Most of the world's spare capacity lies in OPEC nations, primarily Saudi Arabia.

    "The question then is what else can happen," said Erik Kreil, who covers international energy markets for EIA. "If it gets worse in North Africa or the Middle East, production could fall further and you'll have less spare capacity."

    Global spare capacity fell below 2 million barrels per day in 2008 before oil prices spiked to an all-time record of $147 per barrel.

    In other Nymex trading on Monday for April contracts, heating oil lost 2.36 cents to settle at $3.0657 per gallon, while gasoline futures lost 4.25 cents to settle at $3.0039 per gallon. Natural gas rose 11.8 cents to settle at $3.927 per 1,000 cubic feet.

    http://news.yahoo.com/s/ap/20110307/.../us_oil_prices
    Laissez les bon temps rouler! Going to church doesn't make you a Christian any more than standing in a garage makes you a car.** a 4 day work week & sex slaves ~ I say Tyt for PRESIDENT! Not to be taken internally, literally or seriously ....Suki ebaynni IS THAT BETTER ?

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    Jolie Rouge's Avatar
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    Gas prices are about more than just oil
    Jonathan Fahey, Ap Energy Writer – Mon Mar 7, 6:17 pm ET

    When Jay Ricker, owner of the BP gas station off Interstate 70 in Plainfield, Ind., set the price of unleaded gasoline at $3.44 per gallon on Monday of last week, it was 4 cents higher than the Friday before.

    That alone might have been irritating to drivers paying the highest gas prices in more than two years. It was even more so because it happened on a day when the price of crude oil, which is used to make gasoline, fell almost $1 a barrel. "It's up 20 cents one day, down 10 cents the next day," says Oscar Elmore, a courier who was filling up his Ford Taurus at a RaceTrac service station in Dallas recently. "It sounds kinda fishy to me."

    Gas prices rise when oil prices rise, and fall when oil prices fall — except when they don't. What you pay at your gas station depends on an array of factors, from what happens on an exchange in New York to what the competition is charging.

    This can rankle drivers, especially these days. Gas reached a national average of $3.51 a gallon on Monday. That's up 14 cents, or 4 percent, over the past week. The week before, the average rose 20 cents, the steepest increase since September 2008.

    A year ago, the price was $2.75. The average is the highest it's ever been this time of year, and analysts expect it to climb higher in the coming weeks.

    Unlike an iPhone or a pair of jeans or a Big Mac, oil and gas are commodities, and their prices can change every second at the New York Mercantile Exchange and other trading hubs. Those far-off changes affect the cost of the next day's commute.

    Sellers of commodities, like gas station owners and refineries, price their product based not on what it costs to produce it, but on what it costs to replace it. Stations like the Plainfield BP, which gets shipments of gas several times a week, must constantly adjust their prices to keep up with the changing costs of their shipments.

    Oil is the biggest factor in gas prices. It accounts for 50 to 70 percent of the cost. Recent upheaval in the Middle East and strong demand for oil around the world have pushed oil prices over $100 a barrel for only the second time in history. But the price of a gallon of gas at the pump rises — and, yes, falls — for a number of other reasons.

    Oil prices can be moved by geopolitics, the value of the dollar, extreme weather or Chinese demand. Gas prices can be moved by oil prices, refinery problems or even weather that might keep drivers at home.

    In the next few weeks, gas prices are expected to rise as refiners switch to a more expensive blend of gasoline designed to help protect against evaporation during the warmer summer months. "We have to pay whatever the market says we do. It's an instantaneous world," says Joe Petrowski, CEO of Gulf Oil, a big gasoline wholesaler.

    Whether the gas at the Plainfield BP was made from a barrel of oil pumped a month ago 1,000 miles away in Williston, N.D., or three months ago and 7,000 miles away in Kuwait, its price is set by buyers and sellers in New York hours before Ricker buys it.

    There's no way to know exactly where the oil used to make the gasoline sold at the Plainfield BP came from, or even where the gas was refined. Oils from many sources are mixed together on their way to a refinery, and gasolines from many refineries are mixed together on their way to a fuel terminal, where gas is stored before trucks take it to gas stations.

    But here's a plausible route: Oil is pumped by a company with wells in Texas or Louisiana and piped to a major oil hub in Cushing, Okla. From there, it is sold to an energy trader who may store it or trade it a few times.

    Then BP buys it to feed its Whiting, Ind., refinery. After a two-week pipeline trip to Whiting, the oil is cooked into gasoline and piped to BP's fuel terminal in Indianapolis.

    There, BP blends it with ethanol and a few special BP-branded additives and sets a final wholesale price, known as the rack price. It's this rack price that leads to the final pump price for most station owners.

    A wholesaler like BP or Gulf each has its own formula for setting the rack price. In an attempt to smooth out the spikes and dips of the market, a wholesaler usually buys some of his fuel through long-term contracts. The rest is bought on the so-called spot market, priced at a given moment by a benchmark like the New York Harbor gasoline price.

    Every day at 5 p.m., BP tells Ricker what the rack price will be starting at 6 p.m. That price is good for 24 hours.

    Ricker hires a trucker to go to the terminal a short drive away in Indianapolis, fill 'er up with 10,000 gallons and bring it to his station. Then Ricker decides what price to charge customers based on his ultimate concerns: the Speedway and Circle K stations that share an intersection with him.

    There are only two or three pennies per gallon in profit selling gas for most station owners. What Ricker really wants is to attract customers to sell the truly precious liquids: Not the gasoline and diesel outside, but the water and soft drinks inside.

    Three times a day, his station manager, Debbie Sennett, records his competitors' prices. When the competition lowered prices on Tuesday, so did Ricker, to $3.24 per gallon. "Gasoline is the only product in this country that if you're a penny different people will go out of their way to go somewhere else," Ricker says.

    Wholesale gasoline prices have risen 38 cents per gallon, or 15 percent, since the first uprising in Libya on Feb. 15. When wholesale gas prices rise fast, filling station owners get squeezed or even lose money because competition prevents them from raising retail prices as fast as costs are rising.

    So if it seems that station owners take their time lowering prices when oil and wholesale gas get cheaper, it's because that's exactly what they do. "If gasoline prices drop a dime, a station will only pass along one or two pennies a day," says Patrick DeHaan, an analyst at GasBuddy.com, a website that collects and publishes retail gas prices. "They are slower to pass along the discount because they need to make up for money they lost when prices went up."

    Through the first eight weeks of 2011, average gross profit for gas stations was 4.9 percent, according to the Oil Price Information Service. In 2010, it was 6 percent.

    That doesn't draw much sympathy from those who have to pay more at the pump, though. "To me it seems like a money game," says Steve Armonett of Indianapolis, who pulled into Ricker's BP to fill up his Buick LeSabre recently. "They're just worried about how much money they can make."

    http://news.yahoo.com/s/ap/20110307/...FzcHJpY2VzYXJl


    The oil companies are making about 15 cents on every gallon of gas sold. The feds are making 18 cents and the state about 20 cents a gallon. Add all of the profits of all the oil companies, multiply by four and the total is what our government makes off of us buying gasoline. Where is the money going? We have plenty of oil in this country. We can get it responsibly. We need to tell these green idiots where to go before we crash.

    ----

    The oil companies are making about 15 cents on every gallon of gas sold. The feds are making 18 cents and the state about 20 cents a gallon. Add all of the profits of all the oil companies, multiply by four and the total is what our government makes off of us buying gasoline. Where is the money going? We have plenty of oil in this country. We can get it responsibly. We need to tell these green idiots where to go before we crash.

    ---

    I'm sure it's been said already, but it bears repeating that we have an anti-energy production President. For him, the oil price going sky high is GOOD, because it means we peasants will use LESS of it (Of course, there will always be plenty of oil for the plutocrats and their politician minions.)

    There IS NO OIL SHORTAGE. We have productive wells idle, refineries idle, and at least 4 major new oil finds in the last half year. In addition, we have a FIVE CENTURY supply of coal in the Alaska mountains that could be converted to oil via the German process.

    But the neo-druids in the White House and Congress won't let us touch energy reserves that are the PEOPLES' property, not Washington's.

    We need a true populist president who will tell the eco-freaks AND the speculators and industry profiteers to go to Hades!
    Laissez les bon temps rouler! Going to church doesn't make you a Christian any more than standing in a garage makes you a car.** a 4 day work week & sex slaves ~ I say Tyt for PRESIDENT! Not to be taken internally, literally or seriously ....Suki ebaynni IS THAT BETTER ?

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    Jolie Rouge's Avatar
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    Gas is $3.39 here ...
    Laissez les bon temps rouler! Going to church doesn't make you a Christian any more than standing in a garage makes you a car.** a 4 day work week & sex slaves ~ I say Tyt for PRESIDENT! Not to be taken internally, literally or seriously ....Suki ebaynni IS THAT BETTER ?

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    http://www.GasBuddy.com compares gas prices in your local area, helping you choose one with low prices for your fill-up. On Gas Buddy, you can search by city or zip code and find out which local gas stations had the lowest prices in the last 24 hours. In my local area, for example, $3.47 per gallon is the cheapest gas gets. The state average is $3.496 and all but one gas station's prices are at or above $3.49. The highest is $3.63 for regular gas. That's a gas station I'll avoid.
    Laissez les bon temps rouler! Going to church doesn't make you a Christian any more than standing in a garage makes you a car.** a 4 day work week & sex slaves ~ I say Tyt for PRESIDENT! Not to be taken internally, literally or seriously ....Suki ebaynni IS THAT BETTER ?

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    On Friday, 5 days ago, I paid $3.39 , yesterday I walked past the same gas station and it was $3.57.
    Rudeness is the weak person's imitation of strength.

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