Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts

April 21, 2011

Why gas is so expensive, when oil isn't

gas prices, oil pricesPrices at the pump may soon set a record, but analysts say U.S. oil prices and gas prices from 2008 don't reflect the true cost of crude.
By Steve Hargreaves, senior writer



NEW YORK (CNNMoney) -- Gasoline prices have been rising for months and are within striking distance of their 2008 all-time high of $4.11 a gallon. But while oil prices are above $100 a barrel, they're still 24% below their 2008 all-time high.
So why is gasoline so expensive, when oil is so far off its record price?
The answer is that the price of oil Americans see every day has little to do with the price of gasoline at the pump.
Those prices are for a particular type of oil -- West Texas Intermediate -- that's stored in Cushing, Okla.
Thanks to increasing supplies from the Rocky Mountain states and Canada's oil sands, plus a lack of pipelines to move that oil out, there's currently a big glut of oil in Cushing. That's pushing the price of West Texas crude down.
Prices for most other types of oil, which make up the vast majority of oil that refiners use in U.S. gasoline, are much higher than West Texas Intermediate. London's Brent crude, for example, was closer to $124 a barrel on Wednesday.
"It's really a broken benchmark," Tom Kloza, chief oil analyst at the Oil Price Information Service, said of the West Texas price.

Also, it's important to remember that oil and gasoline prices don't move in lockstep with one another. Gas prices lag behind oil prices by a couple of weeks.
During the oil price spike of 2008, gas prices were still trying to catch up as oil prices had already started falling.
That put refiners in a tight spot.
"[Refiners] couldn't sell their product for as much as crude was increasing," Rayola Dougher, a senior economic advisor for the American Petroleum Institute. "People lost money."
Kloza, who crunches numbers for motorist group AAA, agrees. "Crude went up," in 2008, he said, "but gas prices did not follow."
The difference between what refiners pay for a gallon of oil now and how much a gallon of gas sells for -- excluding taxes -- is about 78 cents, said Dougher.
That's slightly higher than normal, but not terribly so, said Dougher.
That's little consolation to drivers, who can expect the price of gas to continue rising. Gas prices have jumped 29 cents over the past 29 days to a nationwide average of $3.84 a gallon, according to AAA.  To top of page

March 13, 2011

Japanese authorities rush to save lives, avert nuclear crisis


By the CNN Wire Staff
March 12, 2011 8:11 p.m. EST

Shirakawa, Japan (CNN) -- A meltdown may be occurring at one of the reactors at a damaged nuclear power plant in northeast Japan, a government official said Sunday morning, sparking fears of a widespread release of radioactive material at a time when rescuers are frantically scrambling to find survivors from the country's strongest-ever earthquake.
Toshihiro Bannai, an official with Japan's nuclear and industrial safety agency, said officials have injected sea water and boron into the reactor at the Fukushima Daiichi facility in an effort to cool its nuclear fuel. He expressed confidence that efforts to contain the crisis would be successful.
A state of emergency has been declared for three reactors at the facility, the same place where an explosion late Saturday injured four people.
Ichiro Fujisaki, Japan's ambassador to the United States, told CNN from Washington minutes after the announcement that he did not know of any "evidence" of a meltdown. A meltdown is a catastrophic failure of the reactor core, with a potential for widespread radiation release.
Japan resident describes nuke evacuation
83 aftershocks in 21 hours in Japan
Gallery: Massive quake hits Japan
Map: 8.9 earthquake hits Japan
Meanwhile, another reactor at the same facility failed Sunday morning -- bringing to three the number of units there that are experiencing major problems in cooling radioactive material, Chief Cabinet Secretary Yukio Edano said. Officials are working to release radioactive steam in order in order to relieve pressure in the reactor.
"A very small amount of radiation has been emitted into the air, although the level is not hazardous," Edano said.
About 180,000 people are being evacuated from within 10 to 20 kilometers (6 to 12 miles) of the Daiichi plant -- which is in addition to the thousands that have already been taken away who live closer by. More than 30,000 more people were being evacuated from their homes within 10 kilometers of the Fukushima Daiini nuclear facility located in the same prefecture.
The news of the possible meltdown came as rescue efforts resumed Sunday morning in areas devastated by the 8.9-magnitude quake and subsequent tsunami, which unleashed a wall of seawater that decimated entire neighborhoods.
Rescuers dug through mud and rubble to find the buried, both alive and dead. Japan's Prime Minister Naoto Kan said more than 3,000 people have been rescued, according to the nation's Kyodo News Agency, some of them plucked from collapsed homes, muddy water and burning debris.
While the official death toll from Japan's National Police Agency was at 689, with 639 missing and 1,570 people injured. The actual toll is thought to be much higher, with Japanese public broadcaster NHK reporting more than 900 dead and Kyodo News Agency saying the death toll could top 1,800.
The number is expected to rise as rescuers reach more hard-hit areas. In one coastal town alone -- Minamisanriku, in Myagi Prefecture -- some 9,500 people, half the town's population, were unaccounted for, Kyodo reported.
With most stores and gas stations closed, a main task for many in the hardest-hit areas Sunday morning was getting by -- and, in some cases, getting out. Scores lined up at the few gas stations, drug stores and grocery stores that had opened, with the shelves largely empty amid the rush to get food and the difficulty in restocking it.
They also braved an seemingly endless barrage of aftershocks. The U.S. Geological Survey reported more than 140 such quakes -- magnitude 4.5 and higher, with the strongest coming at a 6.4 -- in, near or off the east coast of the Japanese island.
Friday's quake was centered about 130 kilometers (80 miles) from Sendai. The city, with a population of about a million, is located in a farming region already battling youth population losses to big cities, leaving aging residents struggling to keep up with the global economy.
While there was little visible damage in that city, the devastation -- most of it caused by the tsunami, which reached several miles inland -- was readily apparent in coastal areas.
Scenes from the quake
How tsunamis happen
Japan's streets unrecognizable after quake
Train cars thrown, crushed in tsunami
In the city of Shirakawa, south of Sendai, rescuers dug through rubble with shovels to try to reach 13 neighbors trapped when the earth opened up and swallowed their homes.
Relatives and friends stood in the cold, with temperatures near freezing overnight, quietly watching, praying and waiting. Others wept.
In other affected areas, military choppers plucked people from rooftops. In some cases, rescuers trudged in muddy water, carrying survivors on their backs. Weary, mud-spattered residents wandered through streets filled with crumpled cars and other debris.
Meanwhile, millions more around Japan were dealing with other repurcussions of Friday's quake.
The quake disrupted rail service and affected air travel. Flight cancellations left at least 23,000 people stranded in two Tokyo airports, Kyodo said. Departing and arriving flights resumed Saturday. Limited rail service also was back in operation Saturday.
Tokyo's Disneyland and Tokyo Disney Sea will close for 10 days, Kyodo News Agency reported, one of a host of closings, cancellations and other disruptions in the quake's aftermath.
About 2.5 million households -- just over 4% of the total in Japan -- were without electricity Sunday, according to Fujisaki, the nation's U.S. ambassador. This marks a steep drop from the previous number, when 6 million households had no power.
A desire to conserve power prompted decisions to turn off lights Saturday at a host of landmarks all around Japan -- some of them hundreds of miles from the main quake's epicenter, like the Tsutenkaku Tower in Osaka, Tokyo Tower and Rainbow Bridge in Tokyo, and Bay Bridge in Yokohama, the Kyodo News Agency reported.
Japan plans to dispatch 100,000 members of its Self-Defense Forces to the quake-ravaged region -- double the previous number -- Defense Minister Toshimi Kitazawa said Sunday, according to the Kyodo News Agency.
Japan's government also has made a formal request for U.S.aid, including military support, and full planning for deployment is in effect, with the U.S. military in Japan taking the lead, according to Sgt. Maj. Stephen Valley with U.S. Forces Japan.
The nuclear-powered aircraft carrier USS Ronald Reagan, along with a guided-missile cruiser and destroyer ship, arrived off Japan's coast Sunday morning to support Japanese forces in disaster relief operations, the U.S. Department of Defense said in a statement.
The U.S. Agency for International Development has sent two search and rescue teams, from Virginia and California. Those teams, of about 150 people and 12 rescue dogs trained to find survivors, were expected to arrive Sunday morning and immediately begin working alongside Japanese and international teams.
At least 48 other countries and the European Union also have offered relief to Japan, and supplies and personnel are already on the way.
The quake was the latest in a series around Japan last week.
On Wednesday, a 7.2-magnitude earthquake struck off the coast of Honshu, the country's meteorological agency said. Early Thursday, an earthquake with a preliminary magnitude of 6.3 struck off the same coast.
Friday's quake is the strongest earthquake in recorded history to hit Japan, according to U.S. Geologic Survey records that date to 1900.
The world's largest recorded quake took place in Chile on May 22, 1960, with a magnitude of 9.5, the USGS said.
CNN's Tom Watkins, Anna Coren, Kyung Lah, Paula Hancocks, Brian Walker, Kevin Voigt and Sean Morris contributed to this report.