Tag: gasoline

Economic dark clouds

  Everyone that isn’t a partisan Republican is celebrating the recent string of good economic news regarding the GDP, unemployment rate, and manufacturing numbers. And for good reason. After three years of stagnant economic conditions, and all sorts of global financial problems, the working class of America is finally getting some belated relief.

 However, let’s not kid ourselves. There are economic indicators that are not only not recovering – they are getting worse.

  Instead of getting caught up with this brief respite of good economic news, with the implication that we can relax now, we should instead be viewing this interlude as a last opportunity to avoid another economic crisis. We should be pushing harder for reform, not relaxing.

 That’s why I want to bring your attention to these issues.

Futures Exchange warns: That $100 Oil = $4 a gallon Gasoline

Crude Oil Futures: Crude Oil Tops $100 for 2018 on Threat From BP Spill

Energy Markets

Margot Habiby, Bloomberg – May 5, 2010

Crude oil futures for delivery in 2018 surged above $100 a barrel this week as the BP oil spill in the Gulf of Mexico led the government to consider a halt in future drilling.

The crude oil futures contract dated furthest into the future jumped after President Barack Obama said no new offshore drilling leases should be issued until a “thorough review” of the April 20 rig explosion. […]

Crude oil futures for delivery in December 2018 rose to $100.38 a barrel May 3 on the New York Mercantile Exchange, the highest settlement since Jan. 20. […]

You may not pay today, but we will pay tomorrow,” Phil Flynn, vice president of research at PFGBest in Chicago, said in a report.


That $100 oil equates to pretty close to $4 a gallon gasoline” in the U.S., said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas. “We know when it hit $3 a gallon two years ago drivers started to get concerned, and at $4 a gallon demand evaporated.”

The End Of The World: Across America Cruising Dies

cross posted from The Dream Antilles

It’s another sign of the End of the World. The NY Times writes the obituary for summertime teenage cruising:

For car-loving American teenagers, this is turning out to be the summer the cruising died.

Kevin Ballschmiede, 16, pined for his 1999 Dodge Ram – “my pride and joy” – the other night as he hung out in a parking lot in this town outside Chicago. Given that filling the 26-gallon tank can now cost more than $100, he had left it at home and caught a ride.

From coast to coast, American teenagers appear to be driving less this summer. Police officers who keep watch on weekend cruising zones say fewer youths are spending their time driving around in circles, with more of them hanging out in parking lots, malls or movie theaters.

The price spike in gasoline, to an average of $4.07 a gallon for regular unleaded, is so recent that government statistics do not yet capture the teenage-driving trend. But the figures show that overall demand for gasoline is dropping. In dozens of interviews, teenagers and their parents said the price of gasoline was forcing hard choices on them.

The End Of The World As We Know It

Or at the least that first effects of The Recession have finally arrived on privileged corners of Manhattan.

This from the The New York Times, which as you will recall, contains all the news that’s fit to print, and chronicles events in the world from its lofty perspective.  The headline: “In weak economy, forgoing $4 lattes for home brews.”

The ”latte effect” of the go-go years had consumers spending $4 a day on coffee. Now the downturn is forcing them to rethink the wisdom of such habits.

As inflation squeezes budgets, middle-class Americans are taking fresh stock of their spending in search of ways to save a nickel or a dime. The result: People are giving up a variety of small financial vices.   ..snip

While the idea that little costs add up is nothing new, it comes with added sticker shock as food and gas prices sprint along at a record pace. The result is that people are finally putting the breaks on vices once considered necessary — like frappuccinos. ..snip

The result is fewer latte runs. Literally.

Last month, Starbucks Corp. blamed rising food and gas prices when it reported a 28 percent drop in second-quarter earnings, and said sales at U.S. stores open at least a year had dropped — indicating some may finally be summoning their inner Scrooges.

This cute article is a sign that even the New York Times, which usually lives in an opulent world, recognizes that the economy is crashing and that even greater discomfort is coming.  Being The Times, it says it’s no big deal.  Ha ha ha.  People are just tightening their belts a little bit.  It’s not a big deal, really.  We’re all doing fine, right??  Well, aren’t we?    

Is A Price Ceiling For Gasoline Off The Table?

Today, as I drove past a local intersection in upstate, Eastern New York with 2 gas stations, Mobil and Sunoco, and observed that the price of unleaded regular was now $4.169/gallon, I said aloud, making a terroristic hand gesture, “Basta ja!  Enough already!  Somebody needs to freeze the price right where it is before it gets even higher.”  Sometimes the truth is said in anger.

Maybe what’s needed in the short term is a price ceiling on gasoline, diesel fuel, home heating oil.  Admittedly this would not be a long term solution to America’s lack of an energy policy, but it might provide some short-term relief to consumers.  And it would provide far more relief than the bogus McSame proposal for a “gas tax holiday.”

BREAKING: Oil Addicted Economy Is In The Breakdown Lane

This is an extremely brief sequel to this gasoline essay.

Here you go:

Oil prices veered wildly on Wednesday, as they swung back from a spike higher on a sharp fall in crude oil stocks shown in weekly data. Crude oil in New York trading jumped $6.79, to $138.10 a barrel immediately after the release of the inventory data. It retreated to $134.66 but was trading up $4.25, to $135.56 at midday.

The government’s Energy Information Administration showed that American crude oil stocks fell 4.6 million barrels to 302 million barrels last week, four times the drop that analysts’ expected.

The price fluctuations came as the Energy secretary, Samuel W. Bodman III, representing the world’s top energy user [that would be the US], said on Wednesday that he would attend a meeting later this month in Saudi Arabia where global energy producers and consumers will grapple with record-high oil prices.

As oil prices have surged 40 percent since January, Washington has differed with Saudi Arabia – the world’s top exporter – on the reason behind the price increase.

Did you get that?  Again:

where global energy producers and consumers will grapple with record-high oil prices

Producers and consumers will “grapple” in Saudi Arabia.  This will be bigger than the Thriller in Manilla.  Not.  This “grapple” is being promoted by the alleged “free market,” supply side, tax cutting Ayn Rand fans in DC.  I wouldn’t expect a caged, no rules, death match.  I’d expect more kissy face and tea with “our Saudi friends.”  And, of course, no short term solution, and no longer term energy policy changes.  Crickets.

Folks, everything is breaking down. Since we don’t have a short term solution for gas prices, I have nothing new to offer, except maybe hiding your wallet.

Gasoline: Widening The Gap Between Rich And Poor

cross posted at The Dream Antilles

Is lack of any US energy policy designed to drive the poorest Americans even deeper into poverty?  To drive them to the cities?  To drive them off their land?  To drive their wages lower? It sure looks like it, and that rising gas prices are the means to those ends.  

This morning’s NY Times, focusing on the Mississippi Delta, finally reveals the problem all of us suspected as soon as gas prices started to spike.  The bleak news:

Here in the Mississippi Delta, some farm workers are borrowing money from their bosses so they can fill their tanks and get to work. Some are switching jobs for shorter commutes.

People are giving up meat so they can buy fuel. Gasoline theft is rising. And drivers are running out of gas more often, leaving their cars by the side of the road until they can scrape together gas money.

The disparity between rural America and the rest of the country is a matter of simple home economics. Nationwide, Americans are now spending about 4 percent of their take-home income on gasoline. By contrast, in some counties in the Mississippi Delta, that figure has surpassed 13 percent.

As a result, gasoline expenses are rivaling what families spend on food and housing.

“This crisis really impacts those who are at the economic margins of society, mostly in the rural areas and particularly parts of the Southeast,” said Fred Rozell, retail pricing director at the Oil Price Information Service, a fuel analysis firm. “These are people who have to decide between food and transportation.”

Put simply, gas at $4 a gallon and more means that the poor, who go without on a good day, are forced to go without even more.  It’s not a pretty picture.  It means that paying for gas competes with the utilities, food, health care, clothing, school supplies, and every other household item.  

Not Better Off.


The national average is over $3.83.  This is $4.00.  And there’s a nearby station that is at $4.089.

Earlier this week my fuel oil tank needed a refill.  Retail price? $4.399/gallon.

A friend who buys bulk diesel fuel told me he last paid $5.069/gallon.

Are you better off now than you were 8 years ago?

El Presidente Repeals Law of Supply And Demand

cross posted from The Dream Antilles

This past week we were all treated to a proposed executive repeal of the venerable Law of Supply and Demand by McCain and Clinton.  Today, not to be undone, El Presidente made it clear that they were too late, he had already issued an executive order nullifying the Law of Supply and Demand.  And by golly, he was going to take credit for that.

According to Bloomberg:

Hillary Clinton and John McCain are both pushing a “gas-tax holiday” to give consumers an 18.4- cent-a-gallon price break. Clinton says the plan will take excess profits from oil companies. McCain says it will help families buy school supplies.

Economists have a different take: They say the oil companies may end up the biggest beneficiaries, while the aid to families wouldn’t be enough to buy a $35 backpack.

The trouble with the plan, they say, is that oil prices are rising because of low supplies, and companies will continue to charge the average $3.60 a gallon and just pocket the money that would have gone to federal taxes.

And this doesn’t even mention that old bugaboo, the Law of Supply and Demand, which holds that decreasing price usually stimulates consumption.  This is that Law: If a bottle of beer was $2 and now it’s $1, wouldn’t you consider having 2 instead of one?  So the proposal, supposedly decreasing the price, would lead to greater oil consumption and then, uh oh, higher prices.