Thursday, March 10, 2011

Fuel cost increases countrywide fueling questions of power turmoil

The typical gas price is rising in every single state in the U.S. It’s all but guaranteed to hit $4 per gallon by summer. Gas costs have been rising, due to unrest in Middle Eastern countries and Libya slowing oil exports and driving the price of petroleum up. Should the industry prove unable to curb cost instability, the American government has stated it’s open to tapping its oil reserves to calm the market.

Government considering use of crisis reserves

Continuing turmoil in Libya brought oil exports in that nation to a standstill, leading to a spike in oil prices. Currently, the average gasoline price per gallon hit $3.51 on Monday, March 7, in accordance with CNN, and gas costs are on track to possibly hit $4 by summer. The prices have been going up every single day for the last 2 weeks. There has been a 34 cent total boost per gallon. Reuters reports that the Obama administration is considering using the U.S. Strategic Petroleum Reserve in order to stop this increase. The Reserve is a storage facility that contains almost 730 million barrels of crude oil, roughly equal to a one-month supply of oil for the entire United States. Reserves will only be used if necessary, administration officials continue to say. In 2005, the Hurricane Katrina disaster occurred causing a release from the reserve. Since the Nixon administration when it was established, it has only been used three times total.

Massive price increase

Since Libya has plunged into unrest, there has been some trepidation in the world sector for oil, but not due to a drop in supply. The United States gets hardly any oil from Libya that produces less than 2 million barrels a day. The Department of Energy reports that Saudi Arabia produces over 12 million a day. A 25 % boost in oil production was changed in Saudi; this more than makes up for Libya losses. The rise of fuel costs isn’t due to a shortage in supply; rather, markets are uneasy because political turmoil is spreading to other oil exporting nations. It doesn't really matter that Libya revolts are stopping oil production. If the exact same thing were to occur in Saudi Arabia, there would be a severe issue.

Obtaining the right cost from Gasbuddy

The site Gasbuddy.com will help individuals find the cheapest gas in their area. Many web sites are used for individuals to report fuel costs. Gasbuddy puts all these together. The Gasbuddy network extends from coast to coast, so there are few places in the U.S. or Canada that don’t have some information posted. A Gasbuddy app is available too. Windows smartphones, iPhones and Androids can all get the app. Since Gasbuddy relies on people reporting the gas costs they see, the site is fast becoming a resource that is quoted by major news agencies as well as a valuable tool for consumers.

Information from

CNN

money.cnn.com/2011/03/07/news/economy/gas_prices/

Reuters

reuters.com/article/2011/03/07/us-usa-oil-idUSTRE7252X520110307?pageNumber=1

Department of Energy

eia.doe.gov/cabs/newint.html

Gasbuddy

gasbuddy.com/



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