And guess what oil is up over another dollar tonight to $104+ a barrel. OIL 104.80 1.56 +1.51% At the rate oil is moving it should be about $150+ by mid to late 2012 with $5.00 gas prices. Get ready for increases on products and services as this will all be passed down to the consumer once again........for some reason I have no clue why BUBBLE ben bernake keeps repeating that inflation is under control, I think he is lying just like the time he said that the sub prime mortgage crisis was contained. Gas prices are highest ever for this time of year The Associated Press | February 18, 2012 | 10:09 AM EST Gasoline prices have never been higher this time of the year. At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April. "You're going to see a lot more staycations this year," says Michael Lynch, president of Strategic Energy & Economic Research. "When the price gets anywhere near $4, you really see people react." Already, W. Howard Coudle, a retired machinist from Crestwood, Mo., has seen his monthly gasoline bill rise to $80 from about $60 in December. The closest service station is selling regular for $3.39 per gallon, the highest he's ever seen. "I guess we're going to have to drive less, consolidate all our errands into one trip," Coudle says. "It's just oppressive." The surge in gas prices follows an increase in the price of oil. Oil around the world is priced differently. Brent crude from the North Sea is a proxy for the foreign oil that's imported by U.S. refineries and turned into gasoline and other fuels. Its price has risen 11 percent so far this year, to around $119 a barrel, because of tensions with Iran, a cold snap in Europe and rising demand from developing nations. West Texas Intermediate, used to price oil produced in the U.S., is up 4 percent to around $103 a barrel. That's 19 percent higher than a year earlier. Higher gas prices could hurt consumer spending and curtail the recent improvement in the U.S. economy. A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That's only 0.2 percent of the total U.S. economy, but economists say it's a meaningful amount, especially at a time when growth is only so-so. The economy grew 2.8 percent in the fourth quarter, a rate considered modest following a recession. High oil and gas prices now set the stage for even sharper increases at the pump because gas typically rises in March and April. Every spring, refiners suspend operations to switch the type of gasoline they make. Supplies of wintertime gas are sold off before March, when refineries need to start making a new formula of gasoline that's required in the summer. That can mean less supply for service stations, resulting in higher gas prices. And summertime gasoline is more expensive to make. The government mandates that it contain less butane and other cheap organic compounds because they contribute to the formation of ground-level ozone, a primary constituent in smog. That means more oil, a costlier component, is needed to produce each gallon. The Oil Price Information Service predicts that gasoline could peak at $4.25 a gallon by the end of April. That would top the record of $4.11 in July 2008. The national average for gasoline began the year at $3.28 a gallon. The average price for February so far is $3.49 a gallon. That's up from $3.17 a gallon last February, a record at the time. Back in 2007, before the recession hit, the average for February was $2.25 a gallon. Prices are higher on the East and West Coasts, where gasoline has risen above $3.70 in Connecticut, New York, Washington D.C. and California. This isn't unusual â states on the coasts charge some of the nation's highest gas taxes. High gas prices put a strain on many people's budgets. Americans spent 8.4 percent of their household income on gasoline last year when gas averaged an all-time high of $3.51 a gallon. That's double the percentage a decade ago. They could pay even more this year, even though demand is the lowest in 11 years as people drive fewer miles in more efficient cars, says Tom Kloza, chief oil analyst at OPIS. Gary Goodman commutes into Manhattan from Edgewater, N.J., because gas, tolls and parking make the cost of driving prohibitive. Goodman, an accountant, commutes by bus. He uses his car mostly for trips to the grocery store or for occasional nights out. He says he has no choice but to eat the higher gas costs. "I already drive as little as possible," he says. Paul Dales, a senior economist at Capital Economics says it would take a bigger shift in the global economy â say, a deep recession in Europe or a slowdown in Asia's manufacturing â for pump prices to drop noticeably. Either event would slow oil demand, depressing prices. But experts expect demand to keep rising. World oil demand is expected to increase by another 1.5 percent to 89.25 million barrels a day in 2012, according to the Energy Information Administration. In the short term, tensions with Iran are feeding fears that oil supplies could be blocked. The U.S. and Europe are tightening economic sanctions against Iran over what the West believes is Iran's attempt to build a nuclear bomb. World leaders fear Israel may be planning a strike against Iran, the world's third largest oil exporter. In response, Iran has threatened to withhold its own oil deliveries and to block the Strait of Hormuz, a waterway along its coastline through which one-fifth of the world's oil flows. On Friday, an international banking clearinghouse crucial to Iran's oil sales said it is prepared to discontinue services to Iranian financial institutions being targeted by the EU and U.S. sanctions. That could ratchet up the pressure on Iran, but also send oil prices soaring. The price of Brent crude fell 53 cents on Friday to $119.58. WTI gained 93 cents to $103.24. Gas prices are already an issue in the presidential campaign. Republican candidate Newt Gingrich spoke several times this week about opening up more federal land to oil and gas drilling as a path toward U.S. energy independence â and lower pump prices. "Our goals should be to get gasoline to $2.50 or less so that working families can actually get to work and retired families can travel," Gingrich said at a campaign event in Los Angeles Thursday.
"Our goals should be to get gasoline to $2.50 or less so that working families can actually get to work and retired families can travel," Gingrich said at a campaign event in Los Angeles Thursday. ---------------------- Our country was built on the production and consumption of autos, I say $2.50 would be good for business. I don't want to walk ride a bike or a bus, I don't want to car pool with my lame ass neighbors, I want to eat, fart, pick my nose in the privacy of my automobile, hopefully something big, fast and noisy.
Deja vu "all over again". Liquidity running wild ala 2007 with the "price at the pump" taking center stage, as opposed to the whatever the Dow prints. Only problem is that this time around there are millions more out of work OR at jobs that pay a fraction of what people made 5 years ago. This is just a tired game of pumping asset prices and hoping nobody notices the uptick in inflation. (Now, I'm going to hear everyone tell me that there is no inflation. )
Thats exactly what it is, a tired game of pumping up asset prices, I have been saying this for years, its the only way they know how to grow an economy, ARTIFICIALLY grow an economy that is....its quite pathetic if you think about it. BUBBLE ben bernanke thinks he has all the answers when in reality he is just creating more of a crisis than there ever was before. Just give it time, this will unfold 10X worse than the last one...may take 3 or 5 or 10 years, but its going to happen...always does.
By the time the SPX gets to 1400 oil will be nearing 110+ Eventually something is going to break, you cannot have rising oil prices with a weak economy, however if BUBBLE ben bernanke unleashes QE 3 I would expect oil to go to $125+ But there is no inflation, right BUBBLE ben bernanke? Right?
--------------- "Our goals should be to get gasoline to $2.50 or less so that working families can actually get to work and retired families can travel," Gingrich said at a campaign event in Los Angeles Thursday.-------- to get there you need to stop printing and pissing the money away.. you need solid currency and small,solid and efficient gvt. we don't have that..we have dummies in DC,who thinks that Iran will nuke US.. meanwhile- --Iran stops oil sales to British and French firms http://www.reuters.com/article/2012/02/19/us-iran-oil-europe-idUSTRE81I07W20120219
KEY COMMODITIES *OIL 105.96 +2.36 +2.27% Do I hear $110 How about $115 $120? $125.... $150+ sold! I hope it gets there and even higher, I will literally max out credit cards and take every dime I have and short it! So let the rise continue!
This is exactly right. We will bounce back and forth between inflation and deflation due to the fact that the entire world has painted themselves into a corner with debt. The only thing that will sustain stocks and spending is stimulus, which will in turn cause commodities to go up significantly, until the prices put the brakes on the economy again.
I won't short it, but I will try to stock up on commodity ETF's after the bubble bursts. Once crude trades under $50/bbl I'll start buying with the intention of holding it back up north of $100.... We may be in a rinse/repeat cycle with money printing....followed by asset price run-ups.... followed by the big burst