The Complete List of Facts and Excuses for High Oil and Gas Prices

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cause and effect of worldwide crude oil price increasesWhy are gasoline prices so high? Excuses, facts, reality or just plain hype - we show them and you decide if these are real, imagined or scare tactics for increasing the cost of a barrel of crude oil and the resulting high cost of gasoline worldwide.

reasons for expensive gasoline Each day our researchers looked at the headlines to see the latest daily excuse for high oil prices. When compiling the list it became obvious that some excuses were completely opposite of previous excuses. Some were just plain stupid, and some excuses required a simple mind if they were to be believed. Some of the daily press came from experts while some was obviously provided by those who play the futures market. Current events or media hype - that became the question. While some excuses angered those with intelligent minds, others were intelligent facts.

reasons for expensive gasoline Crude oil topped $40 a barrel on August 20, 2004. It hit $50 on July 24, 2005. It was $72 a barrel six weeks later, in part blamed on hurricane Katrina. Others blame President Bush for not threatening to release oil from U.S. oil reserves in order to keep speculators from driving up the cost of crude oil. Just in time for summer driving in 2006, problems in Nigera and Iran caused oil to spike again. Oil hit $78 a barrel in July 2006. By 2007 the cost of a barrel of oil was less important than supply-to-demand imbalances.

Oil prices soared in early April 2008, supporting retail gas prices' surge to a new record above $3.30 a gallon, after a dismal employment report sent the dollar lower. Light, sweet crude for May delivery rose $2.40 to settle at $106.23 a barrel on the New York Mercantile Exchange.

reasons for expensive gasoline"There's no correlation any longer between crude oil prices and gasoline prices. Crude could drop to $10/barrel, and you could still have gasoline go to $4/gallon. All the crude oil price does is set a floor on gasoline prices." (Quote by Tim Hamilton, a researcher and petroleum industry consultant with the Foundation for Taxpayer and Consumer Rights)

reasons for expensive gasolineThe Federal Trade Commission said, in May 2006, that the sharp jump at the pump was attributable to market forces including big drops in supply and production, and runs on inventories after major damage to refineries, ports and pipelines. Unable to find villains or proof of price gouging and price fixing by big oil companies these same companies announced record profits.

Having said that, here are the facts and excuses from around the world:

In May 2007 gasoline prices were higher than after hurricane Katrina wrecked a third of the nation's refining capacity. Gasoline prices are higher than ever before. If we are to believe that high prices are not a result of price fixing or price gouging, then we are actually seeing the result of an imbalance between low stockpiles and increasing summer demand for gasoline.

  • Fears new problems at US refineries will constrict gasoline supplies already at unusually low pre-summer levels (May 2007)
  • A refinery fire in Sweden
  • Nigerians running wild again this year
  • Trouble at many of the nation's refineries
  • US inventory stockpiles at lowest level since 1956
  • Extended planned refinery maintenance programs
Excuses given in the two previous years (2005-2006) mirror what we are hearing in 2007:
  • Concern a storm in the Caribbean will become a hurricane and hit petroleum installations in the Gulf of Mexico
  • Fresh worries Iran will miss a deadline to halt its nuclear program (8-18-06)
  • Oil fell $2 to below $75 a barrel today after Britain said it had thwarted a plot to blow up aircraft in trans-Atlantic flight. (8-10-06)
  • BP Plc said it's shutting the Prudhoe Bay oil field in Alaska (8-06-06)
  • Depletion at some of the world's largest fields including Mexico's Cantarell
  • Three Filipino oil and gas workers were abducted in southern Nigeria (8-04-06)
  • Fears that the Israeli-Lebanese conflict could spread to Middle East oil producers = $78.40 per barrel
  • Fear of Nigerian spies (7-31-06)
  • Explosions on Nigerian pipelines, Israel's military action, and tensions with Iran = $76 per barrel (7-13-06)
  • Tension over problems with North Korea cause record high prices (7-10-06)
  • Strong demand and worries about Iran; record high above $75 a barrel (7-05-06)
  • Momentum from strong demand and geopolitical worries
  • World oil prices advanced further as the market focused on tight supplies of US gasoline (6-22-06)
  • Congress has resisted accessing the billions of barrels' worth of oil and natural gas in our (U.S.) offshore continental shelf (added 6-17-06)
  • Mixed signals from Iran over a package of incentives offered by the West for it to give up uranium enrichment (added 6-16-06)
  • Militants kidnapped five Koreans at a natural gas plant operated by Royal Dutch Shell in Nigeria
  • Iran's supreme leader threatened to disrupt global supplies if the West punishes Tehran over its nuclear program
  • A refinery fire cut production at a Valero Energy Corp plant on June 1, 2006
  • An attack on a Nigerian oil rig which included kidnappings
  • Crude futures rose amid expectations of a spike in motor fuel demand during the summer driving season, and as forecasters warn of hurricane activity in the coming months. A barrel of light crude jumped $1.21 to $72.50 on the New York Mercantile Exchange on 30 May 2006.
  • President Bush's Blunders some say George Bush added $15 to a barrel of oil Add $15 to the price of each barrel of oil
  • Concern of new predictions of new hurricanes for 2006
  • A letter from Iran's president to President Bush failed to move the countries closer to an agreement
  • Rising resource nationalism in South America have added to oil-market worries
  • An expected decline in gasoline stocks (note that this excuse was reversed in 2 days as stocks increased)
  • Bullish buying by investors
  • A refinery outage in Italy
  • Supply disruptions in Africa
  • Tight petroleum supplies amid soaring demand could drive crude oil prices above $100 a barrel by this winter (2006-2007), energy experts warned yesterday.
  • Speculators and profit takers bid up the market
  • Bush stops filling oil reserves while experts say refining is the real issue
  • Changes from MTBE to Ethanol cause refining and delivery problems
  • Problems continue in Nigera
  • Concern about meeting demand for fuel as summer approaches (2006)
  • The Iranian government wants nuclear power, but purchased long range missiles while acting like loose cannons

-- Beginning of excuses for 2005 --
  • U.S. government reported in November an unexpected decline in oil supplies
  • Concern about meeting demand for fuel as winter approaches
  • Concern US refineries aren't recovering fast enough from the hurricane season
  • Tropical Storm Wilma - Oct 17 2005 - could move in to the Gulf of Mexico
  • Almost 19 percent of the U.S. total refining capacity is idle
  • French refiners might sit on the sidelines due to strikes
  • Fears of inadequate heating oil supplies this winter
  • Speculation about natural gas shortages
  • Debate about trade and budget deficits as US buys more fuel overseas
Are they stretching it with this one?
"Natural gas yesterday surged to a record on concern that a tropical storm system developing in the Caribbean Sea may develop into another hurricane that could cut production that has been crippled by two storms in the last month." - from September 28, 2005
    And we continue...
  • Storms have exposed the soft underbelly of the U.S. energy system
  • U.S. Gulf of Mexico production remained completely shut because of Hurricane Rita
  • Four refineries remain shut because of damage caused by Katrina
  • Tropical Storm Rita will impede efforts to restore production in the Gulf of Mexico
  • Department of Energy said energy costs in the United States for the upcoming winter would be the highest in a decade
  • Gasoline futures on the New York Mercantile Exchange sent prices 25 percent higher in less than a week - Sep 1, 2005
  • US production recovered more slowly than expected after Katrina
  • Eight major refineries are shut down squeezing U.S. refining capacity
  • Hurricane Katrina appears to be gathering power, causing big problems
  • Hurricane Katrina damaged platforms and ports
  • A fire broke out at a Tesoro refinery in Martinez, California
  • Oil is effected by a superhot, panic-ridden California market
  • Iran parliament rejects president's choice of oil minister
  • Tropical Storm Katrina could threaten oil production in the Gulf of Mexico
  • A fire at a massive refining complex in Venezuela
  • In Nigeria villagers closed down a pumping facility
  • A 2 percent slump in US supplies signaled a thirsty market
  • In Ecuador protesters forced a halt to production
  • The oil market has not fully convinced itself that more than $60 is sustainable
  • US stockpile data expected to show a drop in gasoline inventories
  • Events in the oil-rich Middle East conspire to keep prices high
  • Nippon Oil Corp. suspended operations after a strong earthquake in Japan
  • Chevron Corp.'s refinery in El Segundo, California, shutdown for 25 days following a fire
  • The hot summer helped keep natural gas inventories at worrisomely low levels
  • ConocoPhillips' Wood River, Ill., refinery, was shut after a thunderstorm caused a power failure
  • Premcor Inc.'s refinery in Memphis, Tenn., was closed due to a power outage
  • If sanctioned by the U.S. and U.N., Iran would cut back on oil producing
  • The hot Chinese economy
  • Fear of a supply disruption
  • Rumours of terrorist threats to Saudi refineries
  • US embassy in Saudi Arabia closed for two days
  • Iran's decision to restart its nuclear program
  • Summer is the peak driving season in the US
  • Bombings in London
  • Diplomatic showdown over Iran's nuclear program
  • The recent death of King Fahd
  • Refinery outages in the United States
  • It is a product of trading strategies
  • Dicey conditions in oil producing nations
  • Weather related problems
  • Continued worldwide high demand
  • Strong economic growth in the US, which consumes a quarter of the world's fuel
  • Excessive fuel use by the US military, which use a third of US supplies
  • An explosion at the BP plant in Texas City, near Houston
  • Aging plants that are having difficulty maintaining output at high levels
  • Major oil reserves are becoming harder to find
  • Major oil reserves are more expensive to exploit
  • Strong demand from India
  • Lack of OPEC to increase oil production
  • Canada, which supplies oil to the US, recently signed a deal with China
  • Insurgents have not halted their attacks against the US military in Iraq
  • Insurgents have not halted their attacks against the new government in Baghdad
  • Anxiety over terrorism and the Iraq war
  • Some refineries have had to cut back production because they've been running so hard
  • Decreasing production in the North Sea
  • There are only about 1.5 million barrels of spare daily production that can be used in case of emergency
  • Rebel attacks on pipelines in India
  • A Sunoco refinery fire in Philadelphia
  • The threat of hurricanes
  • A provision in the energy bill signed by President Bush removes protections relative to MTBE
  • Without MTBE refiners have less flexibility in reformulating gasoline, which could drive prices up
  • The dollar is declining in relation to other benchmark currencies
  • No giant new oil fields have been found in twenty years
  • Critical items such as steel casing and tubing are now in short supply and expensive
  • Drilling and operating costs have soared
  • Hurricane Dennis, July 11, 2005
  • Hurricane Emily
  • Concerns that demand was straining the world's capacity to pump and refine crude oil
  • Nigerian rebels have warned oil companies to shut down production in the Niger delta
  • If Chinese demand were comparable to US demand China would consume more than what is currently being produced
  • Yukos bankruptcy where Yukos is a major supplier of upwards of 2% of the world's oil supply
  • Chavez recall vote in unstable Venezuela
  • Darfur's rebels and supposedly Khartoum backed militias, where the real prize is the oil wealth of the Sudan
  • Fear of lower US petroleum reserves
  • OPEC's lack of spare capacity means they can no longer control the market
  • Sabotaged pipelines in Iraq have added to the escalating price of oil
  • Fear of cold weather in the winter of 2005 - 2006
  • Fear that global oil reserves will be entirely depleted by 2038
  • Concerns over Iranís decision to resume uranium-conversion activities

Although the list is in no particular order we will add new excuses as we see them. For those asking why gasoline prices are so high at the pump, or why the cost of a barrel of crude oil is going up every day, we invite you to study our list of excuses. and is your one-stop website for information on crude oil prices, gasoline prices, and the reasons why home heating oil and propane will be very expensive this winter. Who's fault is it? You decide. Is a specific country at fault? You decide.
Food for thought as oil and gasoline prices rise

The pledged release from the reserve came during a bipartisan clamor for action. But the White House has been reluctant to interfere with the free market for oil. That reluctance will dampen the impact of the intervention, said Amy Jaffe, an energy research specialist at Rice University's James A. Baker III Institute for Public Policy. Oil traders in the 1990s knew the Clinton White House would intervene to hold down oil prices, so they would begin selling oil during price spikes. Bush's disinclination has emboldened speculators to bid up oil prices, she said, and they are not likely to sell now because they do not believe the White House will make sure prices fall sharply.

"With Bush, speculators don't see a limit," she said.

Your complete list of facts and excuses for high oil and gasoline prices
On average, households heating primarily with natural gas can expect to spend about $350 (48 percent) more this winter on fuel. Households heating primarily with heating oil can expect to pay, on average, $378 (32 percent) more. Households heating primarily with propane can expect to pay, on average, $325 (30 percent) extra. The average bill for households using electricity to heat their homes is expected to climb $38, or 5 percent.

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