Here's something it WOULD be nice for Obama to "fix"...
Posted: Sun Jan 10, 2010 6:57 am
But wait, that'd help the middle class, something these last 2 administrations have had no desire to do.
http://www.theledger.com/article/201001 ... Per-Gallon
Gasoline Price Heading Back to $3 Per Gallon
Average national cost hits $2.70 a gallon, highest since October 2008.
By Frank Ahrens
& Mike Musgrove
WASHINGTON | Just what Americans need as they try to dig out from the Great Recession: Gas prices headed back to $3 per gallon.
The average national price of a gallon of regular hit $2.70 on Thursday, according to AAA. The price of gasoline is up 67 percent from this time last year and at its highest level since October 2008, a fact not lost on drivers.
Sayed Bilal, a cab driver in Rockville, Md., estimated that he's spending $200 more a month on gas than usual.
"It's affecting everyone's budget," he said, "especially after the holidays. In my business, I depend on people's pocket money. If they don't have any ... " He trailed off, with a shrug.
Why are prices rising even as demand for gasoline is falling? Current demand is well below levels seen in recent years. Oil refiners are actually trimming production.
The crudest explanation, so to speak, is that the price of gas is following oil upward. Oil has been rising, pushed north by increased demand and a weak U.S. dollar.
The global economy has been improving for the last six months, and more activity means more demand for oil, driving up prices. Another factor may be that the prospects for growth are attracting speculators who are bidding up oil prices. At the same time, the Federal Reserve printed billions of new dollars in its efforts to combat the financial crisis, devaluing each dollar in circulation, which may be contributing to the run up in commodity prices.
Even though gas is still well off its high of more than $4 per gallon, hit in mid-July 2008, commodities traders have been watching the price of crude oil rise since almost this time last year. Gas is already over $3 per gallon in Alaska, California and Hawaii.
More than a minor annoyance encountered every time you pull up to a pump, rising gasoline prices make a real impact on the U.S. economy, especially one that's struggling to recover after a nearly two-year recession.
Every 10-cent hike in gas prices equates to an additional $14 billion per year out of consumers' pockets, Miller Tabak equity strategist Peter Boockvar wrote in a research note on Thursday. Americans are spending $1 billion per day on gas.
Rising gas prices reduce other consumer spending, and can affect big-ticket purchases when prices hit certain points. For instance, when gas broke through $3 per gallon in February 2008, Ford forecasters predicted consumers would start buying smaller, fuel-sipping cars when gas hit $3.50 per gallon. As the monthly sales reports came out through 2008 and 2009, that proved true, as truck sales sagged and buyers moved toward compacts.
Crude saw a sharp spike in price in April and since then has been steadily rising, with light, sweet crude targeted for February delivery closing down slightly yesterday at $82.66 per barrel. This marked oil's first price retreat in the past 10 trading sessions.
The heavy snows and frigid temperatures across the U.S. over the past month have reduced gasoline demand, as motorists are driving less.
At the same time, however, the low temperatures have driven up all energy prices, including crude that is refined into heating oil.
When oil closed above $82 per barrel on Wednesday, it passed through something known as a resistance level. In trader-speak, a resistance level is like a soft ceiling - a price that traders do not expect a stock or a commodity to pass, at least not easily and no time in the near term. When oil broke through the $82 ceiling, traders began resetting their price estimates for coming months for crude at $90 or even $100 per barrel. This can translate to $3-per-gallon gas.
There may be some hope for motorists. A report from the U.S. Energy Information Administration on Wednesday surprised traders by saying that supplies of crude oil and gasoline in storage are actually growing. The amount of gas and crude pumped into storage last week was three times greater than forecasters predicted, the government said. If the usual supply-and-demand relationship kicks back in, gas prices may stabilize.
http://www.theledger.com/article/201001 ... Per-Gallon
Gasoline Price Heading Back to $3 Per Gallon
Average national cost hits $2.70 a gallon, highest since October 2008.
By Frank Ahrens
& Mike Musgrove
WASHINGTON | Just what Americans need as they try to dig out from the Great Recession: Gas prices headed back to $3 per gallon.
The average national price of a gallon of regular hit $2.70 on Thursday, according to AAA. The price of gasoline is up 67 percent from this time last year and at its highest level since October 2008, a fact not lost on drivers.
Sayed Bilal, a cab driver in Rockville, Md., estimated that he's spending $200 more a month on gas than usual.
"It's affecting everyone's budget," he said, "especially after the holidays. In my business, I depend on people's pocket money. If they don't have any ... " He trailed off, with a shrug.
Why are prices rising even as demand for gasoline is falling? Current demand is well below levels seen in recent years. Oil refiners are actually trimming production.
The crudest explanation, so to speak, is that the price of gas is following oil upward. Oil has been rising, pushed north by increased demand and a weak U.S. dollar.
The global economy has been improving for the last six months, and more activity means more demand for oil, driving up prices. Another factor may be that the prospects for growth are attracting speculators who are bidding up oil prices. At the same time, the Federal Reserve printed billions of new dollars in its efforts to combat the financial crisis, devaluing each dollar in circulation, which may be contributing to the run up in commodity prices.
Even though gas is still well off its high of more than $4 per gallon, hit in mid-July 2008, commodities traders have been watching the price of crude oil rise since almost this time last year. Gas is already over $3 per gallon in Alaska, California and Hawaii.
More than a minor annoyance encountered every time you pull up to a pump, rising gasoline prices make a real impact on the U.S. economy, especially one that's struggling to recover after a nearly two-year recession.
Every 10-cent hike in gas prices equates to an additional $14 billion per year out of consumers' pockets, Miller Tabak equity strategist Peter Boockvar wrote in a research note on Thursday. Americans are spending $1 billion per day on gas.
Rising gas prices reduce other consumer spending, and can affect big-ticket purchases when prices hit certain points. For instance, when gas broke through $3 per gallon in February 2008, Ford forecasters predicted consumers would start buying smaller, fuel-sipping cars when gas hit $3.50 per gallon. As the monthly sales reports came out through 2008 and 2009, that proved true, as truck sales sagged and buyers moved toward compacts.
Crude saw a sharp spike in price in April and since then has been steadily rising, with light, sweet crude targeted for February delivery closing down slightly yesterday at $82.66 per barrel. This marked oil's first price retreat in the past 10 trading sessions.
The heavy snows and frigid temperatures across the U.S. over the past month have reduced gasoline demand, as motorists are driving less.
At the same time, however, the low temperatures have driven up all energy prices, including crude that is refined into heating oil.
When oil closed above $82 per barrel on Wednesday, it passed through something known as a resistance level. In trader-speak, a resistance level is like a soft ceiling - a price that traders do not expect a stock or a commodity to pass, at least not easily and no time in the near term. When oil broke through the $82 ceiling, traders began resetting their price estimates for coming months for crude at $90 or even $100 per barrel. This can translate to $3-per-gallon gas.
There may be some hope for motorists. A report from the U.S. Energy Information Administration on Wednesday surprised traders by saying that supplies of crude oil and gasoline in storage are actually growing. The amount of gas and crude pumped into storage last week was three times greater than forecasters predicted, the government said. If the usual supply-and-demand relationship kicks back in, gas prices may stabilize.
