Our beloved leaders and their insistence on democratizing the world at the point of a few hundred tomahawk missiles has had predictable consequences. West Texas crude oil hit $109 a barrel today, the highest level since February 2012 when we were saber rattling over the imminent threat of Iran. Gas prices breached $3.90 per gallon then and again in September of 2012 when West Texas crude hit only $99 per barrel. The price at the station near my house has jumped by 8 cents in the last few days to $3.71 per gallon. The national price of $3.62 is headed higher. If and when the missiles start flying, the sky is the limit depending on what Syria, Russia and Iran do. There already appears to be a disconnect, as WTI has surged by 23% since April, but national gas prices are only up 4%. Some of this is due to demand destruction as the high prices and declining economy have led to a collapse in vehicle miles driven and fuel usage.
Some of the disconnect may be explained by the price of Brent crude. It is pretty much flat versus last year, while WTI has gone up 12%. The West and Midwest are most influenced by the price of WTI, while the East is impacted by Brent. The price of Brent hit $116 today, up 16% since April. That is close to the one year high reached in February, when U.S. gas prices hit their high for the year of $3.70 per gallon. Last year ended up with the highest average price for a gallon of gas in U.S. history and that was with falling prices from September through December. The average price in 2013 is only slightly lower than 2012 and we are about to experience much higher prices from September through December. Throw in a hurricane or two and we’ll really be partying. Prices in Chicago and Los Angeles are already above $3.90 per gallon.
There is nothing like high energy prices to kick the ass of this economy. We are already in recession, as the consumer is up to their eyeballs in debt and getting gouged by higher taxes, healthcare costs, tuition costs, and food costs. These soaring oil prices will make everything more expensive, as our economy is dependent upon shipping shit by truck. One of the storylines peddled by the MSM has been the fantastic auto recovery. Thank God Obama saved GM!!!
Again we have a disconnect. The number of vehicle miles driven continues to decline. Why would auto sales be soaring if people are driving less and young people can’t afford cars? The chart below makes the point. We’ve got record high energy prices and a decade long decline in miles driven, but somehow we have a booming auto industry. It couldn’t possibly be driven by cheap credit doled out to subprime auto buyers? Obama and his minions at Ally Financial, along with Bennie and his Wall Street cohorts wouldn’t be using those free Bennie bucks to create the illusion of an auto recovery? Would they?
Do you think the auto recovery is sustainable with rising interest rates, rising gas prices, falling stock prices, increasing bad debt on auto loans, and a recession? If you do, I have some prime real estate in Damascus I’d like to sell you.
I got 35 gallons ar 2.35 and another 40 at 3.35 per on sunday. Close to 3 weeks of gas for 3 cars. Today it was 3.89
Also anyone close to Cincinnati need some tomatoes? Up to my eyeballs in em and have given away at least 2 bushells. Mortgage lifters almost 8 feet tall and I have gotten prolly 100 1 lb tomatoes and uncountable 12-15 oz.
Corn sucked………….
That which cannot be sustained…
…won’t be.
Yet another system reaching the end.
Automobiles are counted as sold when they are delivered to dealers. The dealer has no say in inventory, it is what is called “floor plan”, the transporter shows up with a bunch off vehicles and the dealer (read bank) owns them. Here in fly around country (we can’t get upgraded to fly over country) some dealer’s lots are so full of vehicles they have leased additional areas to park the excess. Even with warm body financing they can’t unload inventory. Some dealers have more cars than the Wal-Mart parking lot.
The information (propaganda) about oil products is on par with the employment statics provided by our Government and their servile media. The BLS counterparts are the EIA (Energy Information Agency of the Dept. of Energy) and the IEA (International Energy Agency). The IEA is HQ. in Paris and was founded by unindicted war criminal and Son of Abraham Henry Kissinger.
The EIA counts C+C (crude + condescends) as crude. Condescends are hydrocarbon family, mostly propane which do not have the energy content of oil. The IEA counts C+C plus bio-fuels as crude. Actual crude oil production peaked before 2005 but what they call crude has leveled off or increased slightly. That warm gentle breeze you feel at your backside is government and their whores attempting to blow smoke up your ass.
In the US only 15% of crude is WTI (West Texas Intermediate), world wide only 5% is WTI. The media reports WTI as being the standard since it is cheaper than Brent. The Media and Futures markets tout the price of gasoline and ignore diesel. They do list home heating oil which is cheaper than diesel. At one time home heating oil and diesel was the some thing different by red dye in one for tax purposes. Diesel is now higher refined to meat clean air standards, more expensive and the new diesel engines will not run on the crap the old ones would.
Ever Wed. CNBC reports the weekly crude inventories. They report crude, gasoline and distillates. The distillates are kerosene, which is made into jet fuels and heating oil which is higher refined into diesel fuel. There is a limit as to the power you can get from a gasoline engine with most diesels starting at powers above the max gasoline engines. Diesel is the most powerful liquid fuel per unit volume. There is no substitute.
The US uses one fourth of the worlds crude (older figures), the DOD uses one fourth of our crude. The DOD uses mainly jet fuel and diesel which are the distillates. When the shortages start, not if, who will be first in line, the DOD or the food chain?
Jimski – I need to get a tanker to follow me around. I get gallons to the mile, not vice versa, and if I am more than a mile from a gas station I could be in trouble.
i locked in a price for 500 gallons of heating oil last week. very expensive. but with the psychos running the country, beating the war drums once again for no good ostensible reason, i made the decision to buy. by the way admin, speaking of not being able to afford new cars, a few people i know can’t afford used cars. you don’t think it might have a wee bit to do with the moronic “cash for clunkers” program, which scuttled the used car market a while back, thus driving prices through the roof. nice job a-holes.
Ilpoh, you’re practicing false frugality by hanging onto your gas-guzzler. If the mileage is THAT bad, you need to get something just a little more economical, even if it’s a 7-year-old Civic. Figure out what you’re spending on gas over what you’d spend on something that gets at least 30 mpg, and if what you’d save in 5 years equals the price of the old Civic, replace your gas-gobbler.
Just breaks my heart to think what I’m missing by not owning a car. Friend here in Chicago had to pay off $800 worth of parking tickets for a clunker that costs her $400 in repairs every two months. I told her, you do not work and you live three blocks from a grocery store that delivers, the el to downtown, and buses to all the north shore malls- why on EARTH do you own a car? To pile more unnecessary belongings you never use, in?
Regular in Fbks has dropped a little bit-from $3.92 to $3.87. I can’t figure out why, but like llpoh, I don’t give much of a shit about the price of gasoline, personally, as long as I can get some. Heating oil, on the other hand, hurts bad up here. I use about 1,300 gallons a year to heat the household. But I topped off a couple months ago-gets me till next spring. Price of diesel, likewise, affects my grocery availability-that worries me.
Ka – maybe you can render caribou down to heating oil. Just a thought!
AKA should have read above. Damn wp.
Chicago – I am not frugal. It is a brand new guzzler. Frugal went out the window some years ago. My scotch bill now exceeds my gas bill. If I was poor I would agree with you entirely. Been there done that.
If gas goes to ten or twenty dollars a gallon I personally could care less. Will save me commute time. I do know the overall pain high gas prices will cause. US prices are still very very low by world standards. Not for much longer, I expect.
PS – no kidding about my Scotch bill. The bill went ballistic when my missus decided she liked single malt, too. I had been plying her with Johnny Walker and saved the Lagavullin for myself. She finally caught on, and there was hell to pay.
Stucky’s batshit Mcnuggets video got pulled, too bad it was funny as hell.