The price of oil hit $98 a barrel today. It was up three times as much as the stock market, but the CNBC bimbos won’t be telling you that. One year ago oil was $84 per barrel. For the math challenged, that is a 17% increase over last year. One year ago a gallon of regular cost $3.37. Today it costs $3.50 a gallon. Last year a low was reached at the beginning of July and gas proceeded to elevate to $3.85 per gallon by September, when the price of oil was lower than it is today. Expect gasoline to breach $4.00 by September this year, even if we don’t have a hurricane in the Gulf of Mexico.
The goofballs in the MSM have a storyline to sell. That Bakken shale oil is making us energy independent, but somehow the price you pay at the pump keeps rising. As anyone with two brain cells should know, its the average price you pay at the pump throughout the year that matters. Our friends at the Energy Dept provide the data that tells the real story:
Last year Americans paid the highest average price in history for a gallon of gas – $3.63 per gallon. We paid this despite the Bakken shale oil miracle and the fact that gasoline usage in the U.S. is as low as it was in 2002. I’m sure this has nothing to do with Peak Oil.
Over the first six months of this year we have paid $3.59 per gallon, with a high likelihood of that going higher over the remaining six months. Let’s provide some historical perspective and assess that no inflation storyline I hear so much about.
Year Average Price
2013 $3.59 (YTD)
So let me get this straight. Gasoline usage in the United States is at 2002 levels, but I’m now paying 268% more than I did in 2002. That War on Terror sure has paid dividends for the average American. Obama and his wise energy policy has resulted in a 153% increase during his reign of error. Some further perspective might shed some light on why the average American family is being destroyed by Obama and Bernanke.
The median household income is about $50,000. It was $53,000 in 2002. The average family drives 20,000 miles per year. The average vehicle gets 20 mpg. Therefore, the average family uses 1,000 gallons of gas per year. In 2002, that would have consumed $1,340 of their household income, or 2.5% of their budget. Today, their gas bill consumes $3,590 of their household income, or 7.2% of their budget.
The average middle class family is making $3,000 less per year, while paying $2,250 more to fill up their vehicles. Sounds like a recipe for economic progress. But don’t you worry. Jamie Dimon and the rest of the Wall Street shysters bet on oil going up, so they made billions. Doesn’t that make it all worthwhile?