Thursday, May 22, 2008

Gas & Diesel Prices Should Be Higher (Like, already $5 a gallon)

I've been watching the recent run-up in gas and diesel prices, and comparing them to the recent run-up in oil prices per barrel, and to me, the numbers don't quite add up.

So, I decided to make a quick spreadsheet to confirm my suspicions. Nothing complicated -- I just took some readings of the oil price, average gas price at the pump and average diesel price at the pump. I did this for winter, spring, summer and fall (January, April, July & October) of 2007 and 2008, and then again for January and May of this year.

For example, in January 2006, the average price of gas (U.S.) was $2.35/gal. The average price of diesel (in Oregon) was $2.41 a gallon. The oil price per barrel was $62.50. This resulted in a ratio of 0.00376:1 for gas, and 0.00386:1 for diesel; that is, the price of a retail gallon of gasoline (including taxes) was 3.76% of the price of a barrel of oil, or 3.86% for a gallon of diesel.

Simple stuff.

In July of 2007, just to give another example, gas was $3.00/gallon (4.14% of a barrel of oil), and diesel was $2.83/gallon (3.90% of a barrel of oil).

Now, however...

In May of 2008, gas is about $3.80/gallon (nationwide U.S. average, your pump price may be considerably higher), and diesel is at an average price of $4.15 (though obviously, it's selling for higher in many places).

That's about 2.86% of the price of a barrel of oil (which just hit $133 yesterday) for gas, and 3.12% for diesel.

The average ratio from January 2006 through January 2008 was 3.80% for gas, 3.97% for diesel.

If we just multiply these numbers by the current price of a barrel of oil, we see that...

Gas SHOULD be selling for $5.05 a gallon, and diesel SHOULD be selling for $5.28 a gallon.

Let me repeat that...


GAS: $5.05/gallon

DIESEL: $5.28/gallon

(Based on what prices SHOULD be, according to historical average ratios of gas & diesel pump prices to the price per barrel of oil over the past two years)

For whatever reason, as far as I know, we haven't seen these average prices anywhere in the country, not even in downtown San Francisco (sure, a couple of stations have already passed the $5 a gallon mark, but not the city as a whole). And that's the most expensive major market in the country, by most measures, when it comes to retail gas prices.

You can quibble with my methodology. This is not a Ph.D. thesis. It's just a back-of-the-envelope calculation.

My prediction? Unless oil prices come down rapidly and steeply, we're going to see pump prices rocket past $5/gallon for both gas and diesel. The only question is when. Next week (after Memorial Day)? Next month? I don't see how the currently-low prices are sustainable.


Oil Prices per Barrel
Gasoline Prices at the Pump
Diesel Prices at the Pump through Feb. 2006
Current Diesel Price

Finally, here's the spreadsheet:

Monday, May 19, 2008

Bicycles: Faster than Cars, Even on Freeways

Well, at least, in L.A., during rush hour:

The "Crimanimalz" decided that, to make a point about bicycling in the City of Cars, they needed to take their message -- and their bicycles -- to the freeways. Now, they ride the sinewy ribbons of concrete during rush hour, and get from point A to point B faster on their human-powered two wheels than anybody in their steel coffins with wheels.

How's that for Critical Mass?

Wednesday, May 07, 2008

Endorsement: Chris Smith for Portland City Council

I'm going to keep this brief, because not everybody reading this blog is in Portland:

Please consider voting for Chris Smith for the Portland City Council, if you are registered to vote in Portland, OR. He's the most qualified for the seat, and with Willamette Weakly endorsing his opponent Amanda Fritz, he will need all the help he can get to be elected.

He's been on the board of Portland Streetcar for ages, and he runs the Portland Transport blog, about improving the quality of transportation in the city. In that arena, he would make a nice complement to a Mayor Sam Adams to provide progressive, visionary leadership for the city.

More info can be had at his web page:

That's it for my endorsements for this primary, though I am personally against all of the three ballot measures on the ballot. More police-state crap, IMHO.