Gasoline Prices Fast Approaching New All-Time Highs
The US consumer just can’t catch a break. Despite a stagnant economy gasoline prices continue to approach new highs. The latest national gas price reading of $3.77 is just 8% below the all-time high of $4.11 set in 2008. It seems like every time things start to look better than expected we get the usual suspects coming into play the role of party pooper. And as gas prices approach all-time highs you can be certain that this drain from consumer spending isn’t helping. Here’s more details from AAA:
“Today’s national average price for a gallon of regular self-serve gasoline is $3.72. This price is fractions of a penny less than yesterday; however it is two cents more expensive than one week ago, 22 cents more expensive than one month ago and 14 cents more expensive than this day in 2011. Not only is today’s price higher than the same day last year but it is the highest ever for this day in history. This marks the first time since April 23 that a national average in 2012 was the highest ever for the calendar day. The second highest average for this day was on August 20, 2008 at $3.717 a gallon and the third highest was last year at $3.578 a gallon. On this day in 2008 the national average price of gasoline was falling dramatically from the all-time high of $4.11 on July 17 of that year to a low of $1.62 on December 30. In 2011, the rate of decline was not as steep as 2008 but prices still fell after Labor Day, dropping from $3.66 on September 5 (Labor Day) to $3.21 on December 21. Even with an anticipated post Labor Day decline in prices, the daily national average likely will continue to set a new record for each calendar day as we head into the fall.”
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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Here is one part of the economy that the Fed has managed to ‘stimulate’. Thank you very much.
For higher crude prices leading to high gasoline, we can thank fears of an Israeli attack on Iran, and also, to a degree, Hurricane Isaac and the fact that we are still in hurricane season. Absent new Iran tensions, gasoline prices should settle into a relatively flat range this winter.
Given that neither Brent nor West Texas crude prices are anywhere near all time highs, why is gasoline close is it’s record? The facts are that the refiners are buying cheap Canadian and Bakken oil at a discount to WT and then are selling gasoline and diesal as if they had paid the much higher world price for the base stock. Someone should be going to jail for this kind of rip off!
So who do we owe this gratitude to? It seems that every time since 2008 when we are approaching a meeting by the central bankers, oil price just creeping up and up and up.
Fed policy of creating rising prices is working.
Thank Republican Senator Phil Gramm, libertarian Alan Greenspan, & Goldman SAchs executive Robert Rubin(Treasury Secretary under Clinton) who pushed for the Futures & Commmodities Act that passed in Dec 2000 –most Republicans voted for it, most Democrats voted against it but Clinton signed it (though he says he regretted it)
&
it went into effect 2001 & later expanded in 2003-2004 that allowed EVERYONE to bid on & speculate on oil & other commodites, including food.
Before that, only people/businesses that were actually going to use the oil/food such as airlines, railroads, refiners, food companies,etc could bid on oil & food & other commodities, which kept prices low
After the Futures Commodites Modernization ACt, everyone could bid on it, such that investigations by various newspapers showed that 70% of bids on commodities in oil & food are now owned by speculators –people/businesses that have NO intention of using the oil nor food but just buying it to flip or hold as investments to drive prices up.
Even worse, sovereign wealth funds by billionaires & oil sheikhs & OPEC nations bid on their own oil commodities, driving up prices even more thanks to the FCM Act.