This news brings into question a couple narratives being peddled to the American public. If the world is awash in all that U.S. fracking oil, why have oil prices gone up 65% in the last year, from the low $40s to over $70? Doesn’t supply and demand work any more? If you are a non-thinking parrot you would say it is due to increased demand because Trump has boosted the economy. You’d be wrong, as total miles driven in the U.S. is up less than 1% in the last year.
The price of a gallon is up 23% in the last year, or about 55 cents a gallon, and rising as we enter the summer driving season. A middle class family with two working parents will use approximately 1,000 gallons per year on average with two cars. That means their gasoline bill alone will be $550 more than a year ago, not to mention all products that will go up in price due to increased transportation costs and heating and cooling costs going up.
Middle class families making between $50,000 and $75,000 got an average tax cut of about $850 this year from the Trump tax bill. About 65% just disappeared in gasoline expenditures, with the rest being silently taken by corporations in the form of higher costs for everything. So it goes for the working middle class.
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You may have noticed, gas prices are on the rise and hitting levels not seen in more than three years. Gas prices nationwide are up a nickel in just the last week. That’s 20 cents in the last month, according to AAA.
Drivers fueling up in New Jersey are paying just under $3 for a gallon of regular unleaded.
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“It was $54.16 for 18 gallons, and I just paid $40 for 13 gallons,” Damian Woo told CBS News.
In California and Hawaii, gas prices are approaching $3.70 a gallon, nearly a dollar higher than the national average.
“There are 10 states that are at $3 a gallon or above,” AAA’s Robert Sinclair said
“We’re seeing extremely high demand for gasoline,” Sinclair said. “With the economy moving along as strongly as it is, there’s a lot more work, and with work, comes a lot more transportation.”
Sinclair says the steady climb is also due to a diminishing supply of crude oil.
“The price of gasoline is going up and we’re now at what is considered the pain point for many drivers,” Sinclair said.
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But the drivers we spoke with said what they pay at the pump is simply part of the price of hitting the road.
“Can you afford the increase in gas prices?” CBS News asked.
“I can afford it, yeah, but I don’t like it,” Woo said.
“You need to put gas you need to go places so you need to pay,” Tania Ortega said. “I hate it, but what are we gonna do?”
Now is the busiest driving season and until September, one analyst said, Americans will pay an extra $200 dollars on gas compared to last year. But prices at the pump are still well-below the all-time high of $4.11 a gallon in 2008.
The Guilty Party Is the U.S. Dollar
The answer to this conundrum is in your wallet. Take out your wallet, pull out a dollar bill, cut it in half, and you have the answer. The U.S. dollar is not worth what it used to be. This is not a revelation to most people. However, most do not realize how a weak dollar affects the prices of all the things we buy, especially gas. The chart below shows the value of the dollar versus the price of oil over much of the last decade.
wtic usd chart
As the chart shows, whenever the value of the dollar goes up, the price of oil goes down. When the value of the dollar declines, the price of oil goes up. The reason for this is simple. The oil market is priced in dollars, so everyone buys and sells in dollars. The oil sheiks get paid in U.S. dollars, so if the dollar does down in value, they require more dollars to receive the same value. The chart is the simplest way to see adjustments in the price of oil relative to the strength of the U.S. dollar. The dollar has been in a downward spiral for the last 10 years. It started its downward move under President Bush because he adopted a weak dollar policy to spur the export of U.S. goods. And when President Obama came into office, he accelerated governmental debt spending, and the Federal Reserve began printing money to help the economy. But neither spending nor the printing of more money has helped the economy. Printing more money has led to a diluted dollar and governmental debt also weakens it. The result? Higher gas prices.
Taken from the below address
https://www.moneycrashers.com/why-gas-prices-rising/
Tip: The cheapest gas is usually on 36th and Lyndale.
Thanks. If I happen by Minnesota on my way home, I’ll get my gas there.
More humor – keep it up.
wrong!!! that’s the ghetto-cheapest price is at
http://www.twincitiesgasprices.com!!!!!!!!!!!!!!!!!!!!!!!
Hey, what is a rise in gas prices when we are doing Israel’s bidding. Isn’t disrupting the flow of oil less important than kissing Bibi’s butt? Who cares if ordinary Americans suffer from high gas prices?
https://www.eia.gov/energyexplained/index.php?page=gasoline_factors_affecting_prices
Factor in as well that the price of crude is dependent on the current value of the dollar buying it, today a little over 92 and down from the 52 week high of a little over 99.
Fule here this weekend was CAD $5.58 per US Gallon or roughly $4.32 USD per.
How much of that price is taxes in Canada?
About 35% on average.
Higher in some areas. Vancouver was at about $6.03 per gallon this weekend. % there is closer to 40%.
We are getting raped here.
Wow and here I thought a buck thirty a litre was outrageous.. it cost me over 80 bucks to fill my Ford Ranger this morning…
Buck thirty sounds almost reasonable.
Almost.. Funny thing is when prices ran up several years back to these levels many were predicting an economic catastrophe and yet today all I see are streets full of brand new Full Size Trucks and SUV’s.. Meanwhile Here I am driving an 11 year old Ranger. The Guy at Ford keeps telling me about the EcoBoost F-150 and how great it would be for me to have one. He dangles keys like they are Jujubes in Candy Aisle at Grocery store. But so far so good, I’ll stick with what is Bought and paid off. Funny thing is people never tire of making fun of my POS truck.. Always telling me that I should trade-in cuz they are getting 10L/100km or some such BS…..
And now Ford is doubling down on stupid. Will stop making cars and instead turn focus, pardon the pun, on gas guzzlers. Great plan and I seem to remember Chrysler doing something similar back in 70’s. If I remember correctly it worked great back then…
https://www.nbcnews.com/business/autos/ford-stop-making-all-passenger-cars-except-mustang-n869256
Anyhoo.. I don’t know how folks can live in the Lower Mainland. Between the price of fuel, the cost of a house and everything else I can’t see how the average Joe can make make go of it…
But I am a simple man..
There are always options. You can by a Tesla and hope your loved ones aren’t immolated.
Agree with the sentiment in admin’s comments, but the math in the intro is wrong. If gas is $0.55/gallon more, and the average family drives 1000 miles, the only way that costs them an extra $550 is if they get 1 MPG.
My bad. I meant 1,000 gallons. 20,000 miles/20 mpg.
“Doesn’t supply and demand work any more?” No. It doesn’t. Virtually all domestic gasoline is traded through an offshore (Atlanta) entity called the Intercontinental Exchange. It’s owned by the big Banks and I think Occidental. They make so much money they actually bought the NYSE. It’s basically Enron 2.0. There are no supply problems. There are no demand issues. I once saw Lee Raymond, the former CEO of Exxon Mobil testify before Congress that if you took the banks out of the price of oil, Even with taxes it would always be under 2 bucks a gallon. It’s just private taxation of energy. Trump is on to it, he tweeted about it a couple weeks ago. https://mobile.twitter.com/realDonaldTrump/status/987284041304100864
Is Trump on it like he’s on the Wall situation?
Come on Jim. Give me a couple minutes to look for some supporting material. I may sometimes have my facts wrong, but I almost always have the truth right. Here’s a nice little article that somebody could start tracking this down with. http://www.ngoilgas.com/news/25-trillion-dollar-oil-scam/
How cute. Someone still believes in supply and demand. I thought that we had all realized that there never has been any such thing since the capitalists took over from the kings.
Personally, I always thought that the only reason that the price dropped so precipitously to the low $40 range was because OPEC (read SA) wanted to squeeze the hydraulic fracturing companies. With the break even for many of these companies in the $60 to $75 range it wouldn’t take long to bankrupt them right out of existence. Most were leveraged to the hilt with huge expenses to lease rigs and other equipment and labor costs were high as well.
Mission accomplished for the most part, so now let the price slide back up and with it gas prices.
There are many confounding variables:
1) Venezuelan production is way down for obvious reasons. This makes our gas prices go up, especially since many of our Gulf Of Mexico refineries are designed to use the heavier Venezuelan crude.
2) Shale/Permian production is up and the Saudis were unable to dent it that much with their ploy a few years ago. But this lighter gravity shale oil wasn’t designed into the the refining capacity in the US. We need heavier crude to blend in with the shale oil. So prices have been sticky in spite of the US shale boom.
3) Even with all this going on, oil futures are in backwardation: that is, oil future prices are way below spot prices. So this blip up in prices should be temporary.
4) Anyway, the refineries are working to use more domestic oil. Refinery profits are attracting more supply. But who the f8ck knows what will happen? My guess is that gasoline prices will be lower next year. I also thought the Sixers would beat the Celtics.
Okay, here is my 2 cents worth..
Oil is traded on the commodities exchange as a future just like wheat, pork, oranges, PM and all other commodities. These trades are done as speculation on the availability of the particular item world wide. Oil from Iran is about to be pulled from the U.S. Exchange for trading. Less availability in the mix drives higher prices.
Now you and I know, the oil from Iran will just go to China or one of the other BRICS members. Probably South Africa or India. With China trading oil in yuan Iran can continue to sell oil. However, traders in the U.S. will not be able to use the expected Iranian supply as a basis for pricing so BAM! the people of the U.S. get forked over.
If I were a betting man, I’d say Trump pulled out of the Iranian deal at the behest of the American Fracking Industry so they can return to profitability. Remember the squeaky wheel gets the grease and the domestic oil companies that invested in fracking squeak the loudest.
Another factor to consider why gasoline prices are rising now is the cost to make the summer blend vs the winter blend. I’m not saying this accounts for the entire increase, but it is part of the rise. It is more costly to make summer blend than winter blend.
“Middle class families … got an average tax cut of about $850 this year from the Trump tax bill. About 65% just disappeared in gasoline expenditures …” ——— Admin
A little Bible lesson for ya. Jesus said, “What the Lord giveth, the government taketh away.” Been that way for thousands of years.
If you listened to starfcker and would just buy a fucken Tesla then none of this would affect you since driving a Tesla is essentially free.
This one has low mileage. He could probably get it pretty cheap if he negotiates well.
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could probably pick this one up at a reasonable price. Just needs a little body work and a new Autopilot. Apparently, the autopilot does not recognize fire tucks.
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This one might require a little more work.
https://www.zerohedge.com/news/2018-05-14/tesla-bursts-flames-after-violent-crash-switzerland-killing-driver-trapped-inside
makes the Ford Pinto Designers absolute amateurs when it comes to making BBQ’s on 4 wheels..
The rims on mine are nicer.
At least that car has rims! Pretty sad eh!
Ford was put on ropes in 70’s building for the Pinto.
Chevy was raked over coals by Nader for building the Corvair.
Yet here we have wonder Boy Musk building a car that is not safe at any voltage.
And folks are still lining up to buy that car and the media turn the other way.
Tesla is making cars with batteries that sit directly underneath the passengers in the car. Brilliant fucken’ idea! Except if those Cells are breached in a collision and the doors can’t be opened any passengers inside can count on being done nice and crispy!
And worse still when Fire Department shows up water is last thing that should be poured on that car to put it out.
https://jalopnik.com/this-teardown-of-a-tesla-model-s-battery-pack-is-pretty-1792825178
There you have it folks a masterstroke of modern engineering if one overlooks the bits that explode right under seats where passengers sit.
If I remember correctly under King Barry it went from about $1.85 to over $3.00.
Then, while condemning US oil production, fracking, blocking the Keystone pipeline, and spouting climate change nonsense, he claimed credit for gas price decreases at the end of his reign.
Truly, a man of the people.
Regular at Phillips 66 yesterday $2.64. This is in the part of Illinois one may think of as “Greater Iowa.” Inside the Shitcago Metro area up to a Dollar higher. Of course there they provide so many important services like picking up all the bodies and settling lawsuits. Six figure jobs for illiterate school “teachers” etc. A paradise on earth.
We have a gas station “gap” problem to be sure. Its more than 20 miles in any direction to a proper gas station. To fill this gap several people and two bars have a tank on premises. Since 91 octane ethanol free is what lasts, thats what they get, and thats whats available. At the ohio tavern its 3.79, and everywhere else its an even 4 bucks.
The cheaper gas with ethanol in it breaks down and turns to shit in three months. 87 octane ethanol free is available 45 miles away. And as expensive and a pain gas is, everyone has toys, and no one has hybrid or electrics. In fact i can only think of two 2wd vehicles in the whole town.
Expensive gas sucks, but its better than no gas at all.
$3.89 St Louis MO last few days.
Shale isnt profitable. Even if oil went back to all time highs for a year and held solid at that price, shale would still be bleeding red. Production from non-shale wells is really what you want to be looking at and that simply is not growing. Oil prices should be much much higher than they are right now. We are currently in a very unique situation where the price of oil is being held down by debt… the debt of the shale rock companies. And the most economical shale formations have already been tapped by thousands and thousands of wells. Just consider the fact that even the best shale sites have resulted in this massive debt…