Gasoline Prices and Trends

by Nudge

– This year’s spring runup was almost unaffected by the same Memorial Day inflection that showed in all the other yearly series.

– A Katrina-like spike could easily put the price somewhere above $5.25.

– This year’s runup has continued for longer than any of the other spring runups.

– 2005 was rather odd .. the refineries apparently overestimated the spring retail needs, overshot production, and drove the price down, which is why the Mem Day inflection was upside-down. That or the refiners made too much winter blend and had to dump it at a loss.

[If you click on image it will enlarge, I’ll fix it later so that it will link to an even larger, higher quality image suitable for printing out and killing more trees – JR]

link to more oil and gas charts

[originally posted July 10th]

33 Replies to “Gasoline Prices and Trends”

  1. Nudge, as you know, I like this chart of yours a lot. In 2005, I wonder why the price trend apparently anticipated the hurricanes in the GOM. This is weird. Could the refiners have known about the peak in C&C that year? I wonder what the other commentors will say.

  2. Doom- one of the few things I learned about po is that you can’t tell a peak has occurred except in hindsight. (Does that make sense? I’m extrememly tired)Perhaps above ground factors played into the upward trend in 05?

  3. T,

    True, I can’t tell what I’ve run over except in hind sight!

    I’d like to say that markets rarely react well. That there is definitive up, there is definitive down. In between is the area that matters, that makes sure you’ll keep what you made on the way up. The markets bobble and weave. They appear irrational and don’t react well to news. Oil is a long term market, not stock, and in my mind it is trying to get a grip on where the price should be given current political and economic realities.

    Katrina had real effects on oil rigs and refineries. It should reflect unless excess capacity is present. If Katrina hit now, what would you expect? Lots of ambiguity in the current market!

  4. Doom, you’d have to check the raw data more closely, but I think Nudge just marked the peak prices at those times as the Hurricanes. In reality the hurricanes took place maybe a week earlier, and there is always a 3-7 day run-up in prices when the hurricanes approach the Gulf.

  5. Great Chart Nudge

    Jr long after you need to make room for more stuff, are you going to keep this chart link available? Please?

    [JR comments: the only thing that gets removed are posts that get no comments, or some of my drunken idiocy, any charts get saved on a mirror site – http://crudeoil.wordpress.com (family oriented) ]

  6. Nudge – how did you get that projection/trendline? Is that a funcyion of the average of all these series?

  7. Nudge, you can look up the exact dates of landfall for hurricanes Katrina and Rita. I found these on Wikipedia. They are: August 29, 2005 and September 24, 2005, respectively. I would suggest to correct your plot with leaders pointing to these exact date locations.

    I was in Sarasota, FL (for yet another meeting) when Rita was spinning in the GOM. We could see the high wispy, cirrus clouds radiating from the storm. They filled the western sky.

  8. The Mem Day inflection point in 2005 is very interesting. It doesn’t mark a peak and fall in this case, but the exact opposite.

  9. Guys:

    The next time I do the chart, I’ll do it in daynumbers (not weeks, which induces a +/- date fuzziness) and will take better care with date placement. The named hurricane spikes were meant to be the /effects/ of the events, not the events themselves.

    nudge
    /* high priestess of the penguin cult */
    /* flipper readings given upon request */

  10. Pulling theories out of my arse this morning, but this is what the chart says to me:

    2004: perhaps the last thing approaching a “normal” year. Increased TPC usage driving demand props up prices; there’s even an October bump that nearly matches the Memorial Day bump.

    2005: the spring spike hits nearly two months early. Continually increasing demand drives prices, culminating in the hurricane spikes. I “discovered” peak oil early in the year. Somewhere late in the year, as prices were bottoming out, I remember telling Mrs. Fetched that we might see $1.80 gas but not $1.50. They actually dipped to $1.85 or thereabouts in this area (not bad!).

    2006: supply constraints begin to make themselves felt, but low hurricane activity allows fall prices to proceed more or less normally.

    2007: supply constraints kick in. There’s no price relief in the fall/winter.

    2008: demand destruction pulls pre-Memorial Day prices below projections, but continued supply constraints (plus demand in BRIC) prop up prices.

  11. Hmmm, sounds like JR is allergic to the connected scatterdot chart type suggested above.

    JR, go read that Neal Stephenson essay. Pay particular attention to the part about Linux being a whole different kind of tool kit. Way back in the dark ages, yes, I had to use long command sequences just to burn an audio cd, but hey, these days we have K3B. And I was using OO before it was OO (starting around build 618 I think) which was way before it had mail merge and labels etc, but now it does everything except read those docx and xlsx files.

    Just heard some newsperson talking about how we’re “now” in a bear market. Do these people ever read the news much? Did the DJIA slide from 14K+ to under 11K somehow escape their attention?

  12. Hey Uncle Yarra[edit:Remus], thanks for posting that very interesting energy flow diagram. It will be incorporated into any future seminars or lectures I give on that topic. I hope I can get the attribution correct.

    The French Napoleonic war diagram was very telling, as well. I believe Alexander’s great army suffered a similar fate. But he kept it going by recuiting from those lands he recently conquered. By the time he reached Babalon for the last time, his army had very few Greeks left in it.

  13. JR, please edit the above post to replace “Yarra” with Remus! My apology, Uncle Remus.

    Looking at that diagram some more, you can see many things, like how much energy is lost (not necessarily wasted) in electric grid transmission, and how little biomass/other biological fuel presently contributes to US transportation.

    If we could only eliminate that electrical loss, we’d also eliminate our current foreign oil input, assuming electrical car conversion. Might as well be wishing for the Moon, though. I’m sure that’s entropic, distributed energy loss, like in heat. Damn.

  14. Doom,
    When I see figures about electrical transmission losses, I always remember this picture in a textbook of a synchronous capacitor somewhere in Canada. It was used to correct the inductance of the long transmission line. In the picture it’s snowing everywhere around, and this piece of rotating machinery has no snow on the housing, and a semi-trailer next to it looks like a toy truck.

  15. >I’m sure that’s entropic, distributed energy loss, like in heat. Damn.

    You would (very likely) be correct. I’ve heard nearly the same numbers when hardcore EV types rapture about PV panels on everyone’s roof to power their vehicles.

  16. AB, putting PV panels on people’s roofs would change the transmission loss figure. A LOT. Since most of the energy produced would be consumed (or stored) at the point of production, transmission/distribution losses would be close enough to zero that we could safely ignore them. Conversion/storage losses would be significant, of course, but they would apply to a fraction of the electricity generated. Excess production would be dumped onto the grid, where the losses come back.

    Example… the evening sun is blazing & your solar panels are going flat-out, generating 3KW. The TV is using a few hundred watts to deliver the evening spews, a few CF lights are on using another hundred, the kids are on the computer, it might be warm so you have some fans running… say 2KW consumption. The system is using the remaining 1KW to recharge the battery bank from running the water pump and the microwave earlier, losing 30% (300W) to conversion… but losing only 10% of the total generated capacity. When the battery bank tops up, the power gets switched onto the grid, where 60% (600W) gets lost — still only 20% of the total 3KW.

    Centralized power generation is seriously inefficient. I remember hearing stories about fluorescent bulbs under a high-tension line being lit just from the electrical field. I always wondered how much of that wasted power you could “catch” with a big honkin’ coil.

  17. At some risk of sounding like a butt kisser, I really like and appreciate our “Uncles”.

  18. “I always wondered how much of that wasted power you could “catch” with a big honkin’ coil.” -FARfetched

    FAR-

    Sounds like an interesting “line” to pursue.

  19. FAR, your comment highlights yet another reason for distributed versus centralized power generation, like PCs versus the big mainframes. FYI, I’m tinkering with small-scale wind power generation, and looking into various electrical power storage schemes in remote areas, far from grids. Think of me as T. Boone Pickins without all the billions. (It rhymes.)

  20. EE, ISTR hearing about someone doing that & catching enough juice to power lights and small power tools in a shed under the power lines. The power company waved lawyers at the guy, claiming he was stealing service, until he stopped. Personally, I see it like dumpster diving: if you’re throwing it away, why should you care if someone else picks it up?

    Doom, I’m also looking into wind. There are several how-tos online. The hard part (for me) is making decent blades, winding generator coils is the easy part. In the end, I think a combo of solar+wind make the most sense for most locations: as a rule, there’s not as much wind when the sun is shining & vice versa.

  21. >AB, putting PV panels on people’s roofs would change the transmission loss figure. A LOT.

    Uh, yeah, I know. Despite appearances, I’m actually pretty up in that area (rather less so on wind). I’m very familiar with the breakdown & analysis; it’s part of my response the inevitable “how long does it take to pay for itself?” query. I have a 3kw PV system and thermal on my roof. I’m in California after all… 9.8 on the ‘DUH!’ scale for solar in most areas with all of our sun. I almost broke 5MWhours actual my first year. Even our small thermal panels give me more hot water than I can use – lots of water saving stuff do aid in that. I’ve only tracked a handful of times when the electric backup heater came on and it’s set to 130F. I’ve yet to use all of the power I make each year (but getting closer now that I’m all electric). I have a large E-W running roof with nothing blocking the sun after 15 minutes of sunrise/sunset.

    PG&E does time-of-use metering so I sell back power during the day for more than what I pay for it at night. We’re fairly good at keeping our peak-use down, even with hosting a few BBSs locally, so our effective bank of power credits is pretty huge. I think that first year it worked out close to 7MWh or a little more. The system is going on three years old now. Lately I’ve hooked up a small thermal exchange system that pulls heat off my inverter’s heat sink. Want to guess how the cup of coffee I’m now drinking was brewed? :)

    I’m in a super-stable grid area – right next to a hospital and fire department, sheriff down the street – so for the moment at least I’m grid-tied. During the Enron debacle we were way, way down the list of zones that would have their power go off. Someday that may change, but for now it’s all good. The UPSes on my systems haven’t tripped once since I moved into this region 12 years ago.

    My problem with – and the target of my annoyance – is the EAA (Electric Auto Association). They use this as a carrot for business as usual. Seriously. Nothing small, like an NEV, electric scooter or bike, is of their interest – not stated, of course, since we’re all earth-luvin folks out here. If it’s not a full size highway speed car the level of disgust is overwhelming. “We don’t do power down” is the gist of the meetings I’ve attended. My side projects are helping folks power down and away from massive consumption. This is something that, since it gets away from the conspicuous consumption model they still support – however greenwashed – engenders no end of ill will.

    No, trust me… despite varying shortcomings, I like solar where appropriate; it’s taking advantage of a local situation much like the semi-externally mounted freezers & refrigerators rather farther north. I can throw in the other caveats, but this is already too long.

    And sorry if I seemed snappy; the standard deviation on knowledge in this area is huge, so I’m edging on some sore points here. If I play dumb at times, it is due to being bored out of my eff-ing mind explaining the logic behind these choices to the shortsighted no-necks who just want to know what’s in it for them.

  22. AB, sounds like a pretty nice setup you’ve got! Illegitimi non carborundum and all that.

    Wind, as a black box, is pretty much like solar: varying amounts of electricity come out, depending on the weather. I don’t know for sure, as I’m just getting started, but I think it’s fairly straightforward to tie the two into the same storage/distribution system.

    In practice, wind is more complex than solar, mechanically speaking. (I’ve read up on it quite a bit). Like solar, trees matter, but trees off to the side can affect windmills that wouldn’t affect a solar panel. You have to let the windmill rotate to catch the wind, obviously — less obviously, there’s the issue of having to unwind the power cable on occasion. There’s also the issue that you can get too much wind where you can’t get too much sun (barring a nova event, which would render this discussion moot), so you have to have a way (preferably automatic) to turn the blades sideways to the wind.

    With solar, if you don’t have a grid tie-in, do you need a dump load when the storage system is topped up? Windmills need them, although it can be just a space heater (outside in the summer, inside in the winter).

  23. >AB, sounds like a pretty nice setup you’ve got!

    Thx. Well, it was either this or the Bugatti. (j/k)

    >With solar, if you don’t have a grid tie-in, do you need a >dump load when the storage system is topped up?

    Yeah, you generally need something – what it can be varies. I’ve seen people go nuts with masses of deep-cycle batteries, but dumping it into a water tank – love that high heat capacity – is popular. Everyone loves a hot shower in the morning, the saying goes. I’ve played around with a few borderline Rube Goldberg looking contraptions – heat transfer units like my coffee maker, and so on. The fun quotient is higher than the effectiveness, but neither is zero.

    One of the interesting side effect of people trying this out, grid-tied or otherwise, is they almost subconsciously put themselves on a power budget. Grid-tied is still most popular as the gov’t rebates are aimed at those (you can do battery backup afterwards), but even there it happens. So, produce 575 kWh/month, and if they normally use even 600 kwh/month they’re suddenly possessed with looking for ways to drop their usage. This is a nice trend, since PV drops at about .5-.7% capacity per year and real-time monitoring plus trend analysis lets them know where they’re at.

    Wind could work well at Planet Georgia? I’d think you’d have a good environment for both that & solar something. I tend to think of the south as at least as sunny as out here.

  24. We are just 2 months away from the time when many people will be turning on their Natural Gas Heaters.

    Any graphs and charts showing last years prices and expected prices for this year? NG market prices have fallen back a bit but how long will that last? With soon to be bankrupt T Bone crusing the country calling for more NG use that is going to only raise prices even more.

    In my suburb there are maybe at best 1 in 40 homes not heated with NG. All the homes built after 1990 are all NG heated only. Some even with lovely NG fire places.

  25. Wind turbines installed in all state legislatures. Repeatedly introduce evolution, legislature pay cut and Controversial Historical Person or Event Holiday legislation. Generate, rinse, repeat. YWMV

    “Some even with lovely NG fire places” I read lovely as novelty. It works though.

  26. We also have an NG furnace, but are working toward making it the backup. We’ll (as much as possible) use the fireplace insert and otherwise wasted kitchen heat to keep warm. With both kids soon out of the house (one’s gone, one’s leaving for college next month), it’ll be a little easier to do because we can close off the upstairs.

    We’ve already filled our tank & it should get us through the winter. Lots more, if we do a good job with the insert.

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