http://www.usatoday.com/money/industries/energy/story/2012-02-22/gas-prices-average/53229358/1 More drivers than ever may pay $5 per gallon - USA TODAY More drivers than ever could soon be paying $5 for a gallon of gasoline. And the national average, up sharply in recent weeks, is likely to top out at about $4. Rising oil prices, lower refining capacity, Middle East tension and speculators are propelling prices. The spike in crude, now at nine-month highs, has driven regular gas to a record February high of $3.65 a gallon â up 42 cents over a year ago. Motorists along both coasts are paying more: an average $4.14 in California and nearly $3.90 a gallon in New York. Taxes, shipping and regional formulations make gas even pricier in some regions. Florida drivers are paying $5.89 a gallon near Disney World, while gas at some Chicago, San Francisco and Los Angeles stations is up to $4.85. "I don't foresee any situation â even a worsening crisis in Iran â that results in $5 a gallon gas nationally," said Patrick DeHaan of price-tracker gasbuddy.com. "You're going to see hot spots ⦠that push prices towards $5, but the national range will be $3.75 to $4.15." Typically, prices climb through Memorial Day. Increased pain at the pump is already heightening fears that consumer spending will slow, derailing the economic recovery. Prices hit a record $4.11 a gallon in July 2008. Hoping to ease griping over a hot button issue in an election year, President Obama said Thursday that there are no quick, easy fixes and ridiculed any Republican plan for "$2 gas." "Step one is to drill, and step two is to drill, and step three is to keep drilling," Obama told a University of Miami crowd. "The American people aren't stupid. They know that's not a plan, especially since we're already drilling. That's a bumper sticker." Speculative frenzy, driven by mounting tensions in Iran, adds $15 to $20 crude oil costs, said Oppenheimer industry analyst Fadel Gheit. Benchmark West Texas Intermediate is now at $107.83 a barrel, its highest since May. Consumers are already reacting. Over the past month, consumption fell 1.4% to the lowest since April 1997, the Energy Department said. High prices will continue slicing gas use. "This tempo won't prevail," said Tom Kloza of the Oil Price Information Service. "It's as difficult to sustain $4 gas as it is to hit .400 in baseball." ---------------------------- Notice how the article does not blame the Federal Reserve Monetary policy.
'Stupid' and Oil Prices - The Wall Street Journal http://online.wsj.com/article/SB100...2.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond 'The American people aren't stupid," thundered President Obama yesterday in Miami, ridiculing Republicans who are blaming him for rising gasoline prices. Let's hope he's right, because not even Forrest Gump could believe the logic of what Mr. Obama is trying to sell. To wit, that a) gasoline prices are beyond his control, but b) to the extent oil and gas production is rising in America, his energy policies deserve all the credit, and c) higher prices are one more reason to raise taxes on oil and gas drillers while handing even more subsidies to his friends in green energy. Where to begin? It's true enough that oil prices can't be commanded from the Oval Office, so in that sense Mr. Obama's disavowal of blame is a rare show of humility in the face of market forces. Would that he showed similar modesty in trying to command the tides of home prices, car sales ("cash for clunkers"), or the production of electric batteries. The oil price surge has several likely sources. One is the turmoil in the Middle East, especially new fears of a supply shock from a conflict with Iran. But it's worth recalling that Mr. Obama also blamed the last oil-price surge, in spring 2011, on the Libyan uprising. Moammar Gadhafi is now gone and Libyan oil production is coming back on stream, yet oil prices dipped only briefly below $90 a barrel and have been rising since October. Something else must be going on. Mr. Obama yesterday blamed rising demand from the likes of Brazil and China, and there is something to that as well. But this energy demand is also not new, and if anything Chinese and Brazilian economic growth has been slowing in recent months. Another suspectâone Mr. Obama doesn't like to mentionâis U.S. monetary policy. Oil is traded in dollars, and its price therefore rises when the value of the dollar falls, all else being equal. The Federal Reserve throughout Mr. Obama's term has pursued the easiest monetary policy in modern times, expressly to revive the housing market. It has done so with the private support and urging of the White House and through Mr. Obama's appointees who are now a majority on the Fed's Board of Governors. Oil staged its last price surge along with other commodity prices when the Fed revved up its second burst of "quantitative easing" in 2010-2011. Prices stabilized when QE2 ended. But in recent months the Fed has again signaled its commitment to near-zero interest rates first through 2013, and recently through 2014. Commodity prices, including oil, have since begun another surge, and hedge funds have begun to bet on commodity plays again. John Paulson says he's betting on gold, the ultimate hedge against a falling dollar. Fed officials and Mr. Obama want to take credit for easy money if stock-market and housing prices rise, but then deny any responsibility if commodity prices rise too, causing food and energy prices to soar for consumers. They can't have it both ways, as not-so-stupid Americans intuitively understand when they buy groceries or gas. This is the double-edged sword of an economic recovery "built to last" on easy money rather than on sound fiscal and regulatory policies. As for domestic energy, Mr. Obama rightly points to the rising share of U.S. oil consumption now produced at home. But this trend began in the late Bush Administration, which opened up large new areas on and offshore for oil and gas drilling that are now coming on stream. Mr. Obama sneered at expanded drilling as a candidate in 2008 and for most of his term has done little to expand it. In early 2010, he proposed to open some new areas to drilling but shut that down after the Gulf oil spill. According to the Greater New Orleans Gulf Permits Index for January 31, over the previous three months the feds issued an average of three deep-water drilling permits a month compared to the historical average of seven. Over the same three months, the feds approved an average of 4.7 shallow-water permits a month, compared to the historical average of 14.7. Approval of an offshore drilling plan now takes 92 days, 31 more than the historical average. And so far in 2012, an average of 23% of all drilling plans have been approved, compared to the average of 73.4%. Oh, and don't forget the Keystone XL pipeline, which would have increased the delivery of oil from Canada and North Dakota's Bakken Shale to Gulf Coast refineries, replacing oil from Venezuela. The reality is that most of the increase in U.S. oil and gas production has come despite the Obama Administration. It is flowing from the shale boom, which is the result of private technological advances and investment. Mr. Obama has seen the energy sun rise and is crowing like a rooster that he made it happen. Mr. Obama yesterday also repeated his proposal that now is the time to raise taxes on oil and gas companies, as if doing so will make them more likely to drill. He must not believe the economic truism that when you tax something you get less of it, including fewer of the new jobs they've created. *** We'd almost feel sorry for Mr. Obama's gas-price predicament if it weren't a case of rough justice. The President has deliberately sought to raise the price of energy throughout the economy via his cap-and-trade agenda. He is now getting his wish, albeit a little too overtly for political comfort. Mr. Obama has also spent three years blaming George W. Bush for every economic ill. If Mr. Obama now feels frustrated by economic events beyond his control, perhaps he should call Mr. Bush for consolation.
From Reuters/IFR: Boston, Feb 24 (IFR) â The inverse Head & Shoulders pattern first hypothesized about well over a month ago in crude oil is playing out bullishly as ongoing concerns over Iran push futures to new highs. As noted before, the pattern is far from textbook in appearance, with a much longer right shoulder than left, not a technical impediment. Depending on how the neckline is drawn, we see measured objectives in the $116-17 region for the current Apr contract. An even larger H&S bottom dates back to last May and provides vastly richer targets. RSI is at its highest levels since last April and ADX and Trend Intensity are solidly trending. February has set a larger range ($13) outside month up which we are viewing as a continuation pattern. Next resistance is at $109.25 and $110.35 Apr, supports $107.65 and $106.45.
Ouch! The truth has got to hurt the liberals here who think Obama is doing a good job. His Administration has been one major mistake after another for America.
Man no kidding. As if the fed's habit of printing massive amounts of currency has nothing to do with rising imported commodity prices. To me the mistakes being commited by Barrack Obama are like chemotherapy. Yeah, its poison but given in the right dosage it may kill the cancer and leave the patient alive. America may experience hair loss, vomiting, nausea, neuropathy and mild psychosis but she also may live so see these liberals run out of the whitehouse and the capitol building. My observation is that democrats, once ensconsed in Washington, tend to overplay their hand and treat their election/appointment as some kind of permanent mandate giving them the right to "transform America". Bill Clinton had the good sense to not do that and the country prospered during his tenure but he is the exception so far as democrat presidents in my lifetime. I'm hoping the republicans get back into power for a good long time. If rising fuel prices helps that to happen then I'm willing to pony up at the pump for awhile to see the thing through.
WTI breaks $109 and is on it's way to $110. Gas price next week should be up another nickel to 7 cents by Tuesday.
It is if one equates household finance with government finance, which is what most folks seem to do. You yourself pointed out the difference quite some time back, while reminiscing on your [formal] economics studies.
Sorry, but the only real difference is that one can print it's own currency and the other cannot. Apart from that, an obscene amount of debt will be detrimental to either.