Rising Gas Prices

[chicagoannie]

$3.29 here today. And Big Oil shows record profits, again.

If gas prices zoom up to the $4 mark again, based on speculation about the Middle East, I honestly think it will kill whatever smidge of economic recovery might be occurring in the US.

[HHM]

I think your right, $4.00 right now seems to be the cut off (of course, they said that about $2.00 10+ years ago). One I thing I found interesting in researching electric cars, gas would need to be $6.00 per gallon to make them cost effective (assuming the price per kwh of electricity stays the same). When you factor in the price premium for an electric car vs a high MPG counter part (like Honda Fit, Ford Fiesta etc), and the cost to actually recharge the electric vehicle, the investment only starts making financial sense when gas reaches $6.00+ per gallon, otherwise, you are better off with a high MPG gasoline vehicle.

[daylate]

That's really very serious problem of every country.
Gas prices gone up day by day and never go down single cent. I agree with experts and that true its price gone very high in soon time.

Not exactly, or even remotely true-$4 a gallon a couple of years ago; 2.50-2.60 last year or so-prices will fluctuate. After oil peaked at 140/barrel it then commenced to fall to something close to $30 a barrel and if I remember correctly, gas was just around $2 a gallon. Problems in this area include increased demand for oil (and other commodities) in places like China & India,etc. as well as the political turmoil in the Middle East and Africa as well as the role speculators/traders/investors play in setting the price. Bottom line we are too dependent on oil and have to do something about it. Unfortunately lots of the solutions require tremendous capital investment and where exactly does that come from? Get used to the roller coaster in gas & food-it isn't going away. Take solace that our imbecilic government way of calculating inflation says it doesn't exist.

[MSbklawyer]

I think your right, $4.00 right now seems to be the cut off (of course, they said that about $2.00 10+ years ago). One I thing I found interesting in researching electric cars, gas would need to be $6.00 per gallon to make them cost effective (assuming the price per kwh of electricity stays the same). When you factor in the price premium for an electric car vs a high MPG counter part (like Honda Fit, Ford Fiesta etc), and the cost to actually recharge the electric vehicle, the investment only starts making financial sense when gas reaches $6.00+ per gallon, otherwise, you are better off with a high MPG gasoline vehicle.

$6.00 is probably not out of the question at all this summer if we get continued unsettledness in the middle east AND a strong storm in the Gulf of Mexico.

[discouraged]

Today I paid 3.29 per gallon, last week it was 3.19, which I thought was getting outrageous.

I was offered a job at the lowest pay I've ever been offered (11.50 hr) and I couldn't afford to take it due to the pay and the travel (25 miles). By the end of the week I would have barely made enough to eat at the rate gas is rising. 3 years ago no one would have even jokingly offered me less than 15 hr. Sad, sad situation.

[banca rotta]

$6.00 is probably not out of the question at all this summer if we get continued unsettledness in the middle east AND a strong storm in the Gulf of Mexico.

Not to mention when Ben's qe2 disaster ends in June of this year he will deploy qe3 starting July or August.

He will continue the demise of the dollar.

[oregonpilot]

well...i saw 3.49 today for regular at many stations. ACK
and i'm in a large city no where near "off the beaten path".

[shark66]

$6.00 is probably not out of the question at all this summer if we get continued unsettledness in the middle east AND a strong storm in the Gulf of Mexico.

I'd honestly rather be paying that in the summer and hopefully be back to some type of normality ($3.00 or whatever) by winter since my house is heated by oil...and even at today's prices ($3.50 for a gallon of heating oil) I'm barely making the ends meet.

Of course, gas at $6 would send everything else flying in the process, but in the summer I can at least pick up fruit and vegetables at the local farms...

Good luck to us all.

[helpme2010]

$3.95 SoCal 2-22-11 (will pass $4 within weeks)

I can't believe it, gas was $3.65 just a couple weeks ago. I passed by my local gas station and it was $3.95. This place is by the freeway so it charges a little more, but I now see in the news because of the Libya crisis that they say gas will go up by 30 cents a gallon in a few weeks.

It blows my mind away when I am searching for jobs that companies are paying less money for jobs (about what I was making 10 years ago), yet everything has gone up over the last decade from food to gas to entertainment. How does the middle class survive?

[Freddy03]

I paid $3.31 today! That's 17 cents higher since Wed!!

I have paid a total of $98 this week along on gas for 2 cars!

[Logan]

I for one am glad that I have been driving fuel efficient cars my whole life. It would take alot more than $4 or $5 a gallon to change my habits.

Maybe America will wake up and get off the dependence of oil from terrorists and dictators. I doubt it--we'd just rather invade a country and have our troops sacrifice their lives instead.

Logan

[discouraged]

Good thing I filled up Wednesday because today it was 3.49 - up 20 cents in 2 days. I think Americans are awake, it's congress - and all those folks who have plenty of money who are asleep. Or trying to get rid of lower and middle class and just have the upper echolon.

[WhatMoney]

Good thing I filled up Wednesday because today it was 3.49 - up 20 cents in 2 days. I think Americans are awake, it's congress - and all those folks who have plenty of money who are asleep. Or trying to get rid of lower and middle class and just have the upper echelon.

Congress can't do much about the price of gasoline - it's determined by the oil companies who refine and sell it. The Republicans will never say a word about rising gas prices - it's just more money in their campaign coffers. And it's not the lower class they are trying to get rid of - they are just pushing the middle class into the lower class. There was little so-called middle class before World War II, just the rich and the poor. You know, the "good old days" 70 years ago some here so long to return to. We are heading there again, ever heard of the robber barons? And the stupid voters continue to accelerate the process by electing tea baggers, the drones of the corporate corrupt.

[tobee43]

it may be time to open up OUR USA reserve of oil to help us poor folk through this mess....

first it's higher oil prices because of Egypt
ok first we hear it's because of Libiya....

then it's the Suez Canal...tranferring down the oil during all the unrest......

tomorrow it's going to be because someone stubbed their toe on an oil drill...what?? only here in the usa don't we take to the streets...(much like we did in the 60's ) and say NO MORE!!!

(and while i don't what pies thrown in my face......good ole bush most likely made trillions on the oil flow during his time)....

no one really knows anymore who sets these prices...it's not necessarily the "oil" companies....:

Libya turmoil prompts oil surge, hits equities| Mon Feb 21, 2011 12:30pm EST

LONDON (Reuters) - "Oil prices charged to fresh 2-1/2 year highs on Monday as traders reacted to increasing violence in major producer Libya, which fed investor fears about rising inflation and unsettled other markets.

Globally, equities were lower but U.S. markets were closed for a holiday.

European equities lost more than 1 percent on a combination of uncertainty over the future of the oil price, increasing signs that higher interest rates may be coming and more evidence of a surprisingly poor earnings season.

Together, the worries overshadowed reports of solid European economic growth.

Gold powered to its highest levels in seven weeks, above $1,400 an ounce, helped along by both inflation fears and risk aversion.

Protests broke out in the Libyan capital Tripoli for the first time following days of unrest in the city of Benghazi and some army units defected to the opposition in what has become one of the bloodiest revolts to convulse the Arab world.

Financial markets are particularly sensitive to the violence in Libya because it exports around 1.1 million barrels per day of crude.

Brent crude gained $2.50 a barrel to hit a new 2-1/2 year high above $105.

Rising oil prices feed into inflation, one of the main current concerns of investors, who are otherwise in a generally bullish mood on expectations that the global economic recovery is now sustainable.

"The situation in Libya looks pretty bad and we're seeing safe-haven flows on the back of that," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin.

MSCI's all-country world stock index was down 0.3 percent and the FTSEurofirst 300 closed down 1.3 percent.

The European weakness came despite euro zone manufacturing data above consensus and the strongest Ifo sentiment data out of Germany since reunification.

European stocks have been hit by mixed earnings. Thomson Reuters Proprietary Research reported on Monday that the number of European companies missing fourth quarter expectations is outpacing those beating them.

The earnings growth rate, actual and predicted, for the STOXX 600 is 18.9 percent, compared with a December estimate of 36.1 percent.

Shares in Carlsberg, for example, fell on Monday after the brewer posted a surprise fall in fourth-quarter operating profit.

EURO WAVERS

The euro slipped as the rising tensions in the Middle East dented risk sentiment.

But it earlier hit its highest level in more than 10 days against a background of hawkish comments from European Central Bank officials that added to expectations a rise in interest rates is on the way this year.

The common currency was trading at $1.3670, down around 0.1 percent on the day. It rose to $1.3727 earlier in the session, the highest since February 10, extending a rise on Friday that was also related to comments from an ECB Executive Board member.

With an Irish election on Friday likely to put in power a party which is openly calling for a renegotiation of its EU bailout agreement, strategists say there is a risk that the euro could come under pressure.

Euro zone policymakers are also struggling toward a more comprehensive package that they hope can put an end to debt troubles.

"With neither the core nor the periphery signaling willingness to find a compromise on the issues for now, the chances are that potential political impasses could erode euro sentiment going forward," said Valentin Marinov, strategist at Citi FX.

Core euro zone bond yields were lower as investors bought safer assets in the face of the Middle East and North Africa events."

moving on........


"oil prices today who sets prices"


Fri, Feb 25 2011

WRAPUP 2-Fed officials play down oil price risks

NEW YORK, Feb 25 (Reuters) - "The Federal Reserve would react to higher oil prices only if the increases spilled over into broader areas, officials of the U.S. central bank said on Friday, with one policy maker calling the risks "manageable."

In a similar vein, an official of the European Central Bank said policy makers should be wary of responding too soon to the recent jump in oil prices as it may be fleeting.

Oil prices have risen as political tensions in the Middle East and North Africa have raised fears that the unrest could spread to other major oil-producing countries, stoking fears of even higher fuel prices and inflation risks around the world.

The president of the Richmond Federal Reserve Bank, Jeffrey Lacker, took a calm view of the potential threats to the U.S. economy from the higher oil prices, though he said they could prove nettlesome if they jump much more or create an inflationary psychology.

"I think the oil price rises we've seen so far don't pose a risk to the recovery," he told reporters after a speech on regulation.

"Oil price changes could have the potential, if they were very large, for slowing the recovery, but we have a lot of experience and a lot of data on past instances, and I think it's a manageable risk," he said at a conference organized by the University of Chicago's Booth School of Business.

Janet Yellen, the Fed's vice chair, said U.S. central bank officials would react if inflation expectations or underlying inflation show persistent gains and began to be reflected in other prices.

"Any increase that would seem to be sustained in inflation expectations, or in core inflation, that looked like it were getting passed through and it was sustained, would ... demand a response," said Yellen, who is viewed as among the strongest proponents of aggressive measures to support the economic recovery.

Yellen, who also spoke at the conference organized by the Booth School of Business, has a permanent vote on the Fed's interest-rate setting panel and her position is seen as close to the consensus view at the institution.

Lacker said there is a danger that prices that are uppermost in consumers' minds -- such as retail gasoline prices -- could spur fears of wider inflation, which ultimately could push prices up.

A rise in inflation expectations can be self-fulfilling if it leads businesses to raise prices and workers to demand higher wages. However, with the U.S. unemployment rate at 9 percent, many Fed officials do not see much scope for wage increases.

An official from the European Central Bank said policy makers should be wary of responding too soon to the recent jump in oil prices.

"It depends very much if it is temporary or not, which means monetary policy does not respond immediately to such a supply shock, nor should it," Vitor Constancio, the ECB's vice president, said in response to questions at the Booth School conference.

Currently, it appears unlikely that oil price rises will pass through to wages, he said, though he cautioned that central banks must be vigilant about inflation and be willing to act if necessary.

"We cannot allow inflation to be embedded in the economy," he said.

SUSTAINED RISE DEMANDS RESPONSE

Some Fed policy makers have suggested it might be time to reduce or taper off the central bank's $600 billion bond-buying program in light of a strengthening recovery, but others feel higher oil prices could create headwinds to the recovery.

Oil prices LCOc1 retreated from 2-1/2-year peaks of almost $120 a barrel hit in London on Thursday to hover below $112 on Friday on Saudi efforts to plug supply gaps.

Yellen said the Fed's long-term commitment to loose financial conditions will shift when the time comes for the central bank to withdraw its support for the U.S. economy.

"Once the recovery is well established and the appropriate time for beginning to firm the stance of policy appears to be drawing near, the (Fed) will naturally need to adjust its 'extended period' guidance and develop an alternative communications strategy," she said.

One of the most committed skeptics of the Fed's easing policies, Kansas City Fed President Thomas Hoenig, also played down the risk that oil prices would derail the U.S. recovery.

"It's a matter of whether it is a permanent factor. I don't think that it is right now," he said in an interview on CNBC.

However, an official from the Bank of England warned that policy makers should not be complacent if core measures of inflation that strip out volatile energy and food costs are low.

"If say, you have an oil price shock ... and that does lead to inflation expectations moving up, pay growth moving up, significant second-round effects being embedded and so forth, what would happen, of course, in the medium term is core inflation would move up to the headline inflation, not the other way around," BoE Deputy Governor Charles Bean said at the same conference.

Policy makers must look carefully beyond core inflation for second-round effects of overall inflation to see if there are any forces driving up wages, he said"



GREEDY BUSINESS......that's who!!!!!!

[Logan]

I think your right, $4.00 right now seems to be the cut off (of course, they said that about $2.00 10+ years ago). One I thing I found interesting in researching electric cars, gas would need to be $6.00 per gallon to make them cost effective (assuming the price per kwh of electricity stays the same). When you factor in the price premium for an electric car vs a high MPG counter part (like Honda Fit, Ford Fiesta etc), and the cost to actually recharge the electric vehicle, the investment only starts making financial sense when gas reaches $6.00+ per gallon, otherwise, you are better off with a high MPG gasoline vehicle.

Here's a cost comparison to input your own numbers.

http://www.ccds.charlotte.nc.us/~jarrett/EV/cost.php

Also, a tax credit will likely offset the cost of an electric vehicle versus gas.