And have to say went up almost 12 cents in the last few days, its only pennies but makes me smile as I pass the pump
Your cost of driving does go up with the gas price so I wonder what the reason for the smile is. Hopefully the gas price going up is a sign of economy recovering then everyone will smile.
The smile is for me getting rid of a month old PT cruiser that I got 20MPG at best :rockon::rockon::rockon:
Some would call that a "Hybrid Smile." I know I get one while filling up my tank. Current US national avg. per gallon: $2.13 One week ago: $2.04 One month ago: $2.02 One year ago: $3.62 Source: gasbuddy.com Gas prices are very reasonable right now.
My guess was in the same region, but it was predicated on the US government actually regulating the futures markets. A bill was reported out of the House Agriculture committee, but nothing's happened to it since. Agriculture, of course, were really interested in regulating the wheat and corn futures markets, but it would have a knock-on effect on all commodity futures. They were concerned that the prices on the futures markets were completely out of whack compared to what it should have cost, preventing the actual physical suppliers and consumers from achieving efficient pricing. If you look at this chart, you'll see that Open Interest on crude oil has started to accelerate again. I think that's a bad thing - there shouldn't be this many actors in these markets.
I think that gas prices will rise with a vengeance once the economy begins to recover - possibly slowing said recovery.
Of course... nothing like shooting a man while he's trying to get up! They just can't wait to be greedy again......Its what they live for.
The way I explain it to people: You spend money when gas is inexpensive. You spend more when the price goes up. I save money when gas is inexpensive. I save more when the price goes up. This chart should (might) update with time.
It's not energy per se that will be the major brake, it is inflation in general (energy will just be the most obvious component.) The deficits run for this whole decade are going to impact the dollar. The U.S. has a choice: either adjust taxes to keep up with expenses, or try to "inflate" out of the hole that was dug for the past 8 years. Cost containment would be the 3rd logical choice, but that opportunity was wasted for 8 years, or at least 6 if you only look at post-recession. If you cost contain Federal/state spending now you will get a 1937 style recesssion...or much worse. The lesson is to cost contain during good times...not in bad, it needs to be counter-cyclical in relation to business. My guess is that we are in for several years of high single digits inflation before we start trying to pay as we go. If so that will be a good time to lock in some long term high interest rate fixed investments to pay for retirement. From what I gathered some folks did this in the 80's...and did quite well with effectively no risk for the past two decades. I remember ignoring 8-10% fixed funds in the early 90's. The fixed rates dropped as the older investments matured to be replaced by newer lower return instruments, one I have was at 10% for many years but is now at 5%.
I'm sure they are gearing up for Memorial Day and the summer to see how much the market will bear BEFORE WE SQUEAL!
Latest EIA report seems to make sense of it: 1. Refinery utilization capacity is down. 2. Gasoline demand is very slightly down from 1 year ago, but diesel demand is way down (14%). 3. Crude prices are rising. These make sense as a set. With rising crude prices crack spreads will be poor or negative, so it is logical not to increase refinery rates until gas prices are high enough to generate an acceptable spread. Plus, with diesel being in surplus and about 30% of the gas/diesel volume there is another major disincentive to increasing refining rates. One could be making a little money off the gasoline, but losing more than that off the diesel at present.
