Gasoline At Historic Highs -- Christian Science Monitor

Don't write me .. write the White House or the Christian Science Monitor .. I'm just passing along the story.

The Christian Science Monitor is reporting that US gas prices have hit an historic high. Cue up Connie Francis. Gee, just a week ago or so, the administration telegraphs that is has no plans to approve the Keystone XL.

I didn't know this until recently, but it is my understanding that different US refineries use two different types of crude oil: heavy and light, but most (?) US refineries use heavy oil. Heavy oil is imported from Canada, Venezuela, Saudi Arabia. So, killing the Keystone XL, means heavy oil deficit will be made up through imports from Venezuela and the rest of OPEC.

Canadian oil is selling at a $30 discount to Brent but killing the Keystone XL ....

If the Keystone XL had been approved two years ago, I wonder how far along it would be by now ...

I digress... back to the CSM story:

A combination of high crude prices, refinery shutdowns, and early speculation has sent gas prices soaring to seasonal highs earlier than usual this year, with no signs of prices at the pump falling until spring, according to recent estimates.

Higher crude prices. This rise, especially overseas, has pushed up prices at the pump, says Michael Green, a spokesman at AAA. [Fact check: "higher crude prices, especially overseas" -- Canadian oil is selling at a $30+ discount and this administration telegraphs no desire to increase Canadian oil imports.]

“This year oil prices are rising with expectations that the global economy will continue to improve,” says Mr. Green. “Gas prices are intimately connected to oil prices, [which are] very much connected to what is going on in other parts of the world. Events overseas have a big effect on prices American motorists pay at the pump.” [Fact check: domestic politics also have a big effect on price American motorists pay at the pump: killing the Keystone, fracking regulation uncertainty.]

In fact, crude oil prices have risen 10 percent during the past two months, and the price of crude accounts for almost 70 percent of the cost of a gallon of gas, according to the US Energy Information Administration. [Fact check: "crude oil prices have risen 10%" - Canadian oil sands oil is selling at a $30+ discount.]

And the second page of the internet story mentions "speculators" -- something we have not seen/read/heard about for the past year or so.

Expect to start seeing more stories about "speculation" going forward.

I did not post the story a reader sent to me yesterday, but folks in Washington want to increase taxes on gasoline / crude oil to pay for more Federal spending -- my hunch is that increasing taxes on gasoline / crude oil will drive up the cost at the pump a lot higher and a lot faster than any of the reasons that the CSM mentions for the current rise in the price of gasoline.  Watch for code phrases/code words for increased taxes on gasoline in the State of the Union Address tomorrow night.