Category → oil prices
New doomsday gas price predictions
Some economists are so woeful on the diminishing strength of the US dollar, they’re predicting $6/gallon gas before the summer is over. Of course, it’s not merely the weakness of the dollar that plays into this, but the US’s insane demand for dozens of boutique gasoline blends over the summer months, using Algorism excuses.
Now more than ever, this economy needs the budgetary restraint Paul Ryan’s budget promises; in fact, he needs a whole lot more than than, but at least Ryan is running in the right direction, which is to slash spending. Not just slow the rate of growth, but real cuts that result in real savings. Maybe Ryan and Wisconsin Governor Scott Walker need a Mega Meeting web video conferencing solution to get the message across; that’d be a nice counter to President Obama’s fake Facebook town hall.
Should I renew my prediction of $12/gallon gas in light of the panicked predictions of economists?
Gas prices spiking during low-price season
This time of year, gas prices are typically low; but with the unrest in Egypt and Libya, oil prices are spiking to the highest point ever for a February at over $100 a barrel. That translates to $3.49 a gallon for regular unleaded in the Twin Cities of Minnesota, over $4.00 a gallon in California and a national average of $3.29 a gallon.
That kind of price-at-the-pump are causing consumers to return to anger and frustration similar to the summer of 2008, and raises fears for where prices might head this summer. Saudi Arabia is said to be considering increasing production to bring the price down to sub-$100/barrel levels, but so far that action has not realized a lower market price.
If gas prices continue to spike, it could spell doom for the economy, at least in the short term, and could also spell disaster for Obama’s re-election hopes. However, if the GOP can get some domestic drilling reform passed into law, there could be relief on the way. Either way, pump prices need some solution to achieve some financial weight loss products‘ results sooner rather than later.
OPEC wants $100 per barrel
Members of OPEC are trying to force the market to a target price of $100 per barrel, according to the latest media reports. With the current price of oil at $94.74, thanks primarily to a weak US dollar under President Barak Obama, they are already most of the way to their goal.
Only Saudi Arabia – the largest exporter of oil – is breaking from the pack. They would prefer to see prices retreat to $75 a barrel, a drop that would restore the price at the pump to around $2.50 per gallon, give or take a little. A rise to $100 per barrel would push US gas prices close to $3.25 per gallon for regular unleaded.
Tis the season to be greedy, if you’re OPEC, it seems. Maybe OPEC execs need to spend more time enjoying a massage therapy program online, rather than thinking up ways to artificially prop up prices and ruin the world economy. Again.
Obama, Dems will get it wrong again on oil
President Obama and other Democrats in tidy bow ties have jumped on the oil mess in the Gulf, headed by BP, as an opportunity to pull back on Obama’s promise to expand off-shore drilling. And once again, they form policy for all the wrong reasons.
Do oil companies like BP need to do better on safety precautions and contingency plans? You bet. But should we expect that nothing ever goes wrong? A bit unrealistic, that.
I for one simply refuse to believe that there’s any sort of nefarious plot on behalf of BP to pollute the Gulf. Does any reasonable person believe BP wants to be losing all those oil riches into the ocean? Of course not. It’s lost money… and a lot of it.
But is this incident any reason to call expanded off-shore drilling “dead on arrival,” as many Dems have? Absolutely not, because none of the important factors have changed.
The important factors are that other countries that are a lot further away from the Gulf than us are still drilling there; that we are far too dependent on other countries to supply our oil needs; that the less oil we produce domestically, the stronger the likelihood becomes that OPEC and other players can control our economy by controlling our oil prices.
Right now, Obama and the Dems are acting like the kid who falls over and skins a knee trying to ride a bike and vows never to ride a bike again. Is this thing in the Gulf terrible for the environment and a big, huge mess no one wants to see repeated? Absolutely.
But it’s not a reason to back off from off-shore drilling and thereby increasing our dependence on foreign markets to meet our oil needs.
Obama policy: $7/gallon gas
A new Harvard study is that the Obama Administration’s emissions goals for so-called greenhouse gases, which he wants reduced by 14 percent from 2005 levels by the year 2020, would result in boosting the cost of gas to a staggering seven dollars a gallon, more than four dollars above current prices.
The bulk of the increase would arise not from oil shortages, supply chain challenges or even war in the Middle East, but simply from new, confiscatory increases to fuel taxes, sufficient to drive most low- and middle-income Americans out of their cars and force them economically onto transportation.
The naivety of such a policy, however, is readily apparent to anyone who understands market economics, as well as anyone who remembers what nearly $4.00/gallon gas did to our economy in 2008. To wit: we’re still recovering from the economic slow-down it caused.
To make matters worse, gas at seven dollars a gallon would skyrocket inflation to unheard-of levels and force even the middle-class into the category of the “working poor,” effectively killing off most small businesses.
Real bright idea, Obama… go sell insurance quotes to Acorn and leave the country alone, will ya?
Companies pulling out of cap-n-trade partnership
Like the best hemorrhoid treatments do to hemorrhoids, market forces appear to finally be forcing global warming measures to the sidelines where they belong. Word is that several companies have pulled out of the US Climate Action Partnership; the latest to jump off are BP, ConocoPhillips and Caterpiller, though they are not alone.
The USCAP existed to help government and business to cooperate on shepherding emission cap legislation… including the notorious “cap and trade” bill… through Congress and into law. Less then a year ago, the measure seemed to be coasting toward approval, but now with a souring economy, more and more companies are not anxious to enact measures that may have minimal environmental impact while skyrocketing the price of goods and services.
Said ConocoPhillips’ senior VP for governmental affairs Red Cavaney, “USCAP was starting to do more and more on trying to get a bill out without trying to work as much on the substance of it.”
Of course, while Bill Clinton forged the path of symbolism over substance in the 1990s with his “politics of meaning,” the scam has been forged into an art by folks like Algore, his zittoheads and President Barak Obama.
Certainly, however, this distancing from global warming-inspired legislation has been helped in no small part by one of the coldest, snowiest winters in quite some time; as one GOP lawmaker recently commented, wryly, “Word is the snowstorms ain’t gonna stop until Al Gore cries uncle.”
If only…
Oil prices at $55 per barrel, OPEC wishes for $80
At close of market on Friday, oil closed at $54.43 per barrel, well below the high of $147 per barrel price suffered through this past summer. As consumers enjoy gas below $2.00 per gallon for the first time in years, the drop in price is nevertheless a fluctuation in demand. US demand for oil dropped 12.8 percent from a year ago, and even demand in China is down.
This roof cleaning action by the market after a price-roof-breaking summer is a welcome relief to most consumers. However, OPEC has been making noises about wishing prices would rise back to a so-called “fair price” of $80 per gallon, although the Saudis say $75 would be more appropriate.
Still, these are the same folks who, when oil was going for $147 per barrel, were claiming $60 per barrel would be a fair market price. Now that we’re back in that vicinity, they want to drive it up again?
Never trust an oil baron.
Oil falls below $100 per barrel again
It’s a bit premature to forget that electric car and start looking into an old bus for sale; however, oil did fall below $100 per barrel on Monday for the second time in less than 30 days. By midday trading, oil had fallen more than eight dollars off Friday’s closing price, averaging around $98.65 per barrel.
This is despite US Gulf Coast crude production still ramping up following Hurricanes Ike and Gustav; presently, 57 percent of oil and 53 percent of natural gas production from the Gulf Coast region remains shut down; as these facilities ramp back up, a further tumble of gas prices is expected, which could bring oil as low as around $80 per barrel over the next 30 to 45 days, which could be low enough to see US pump prices dip below $3.00 per gallon for the first time since early 2008.
In other words, things are looking up; however, in the long term they will only stay stable at these lower levels if offshore, shale and ANWAR remain on the table to increase US production in the near term, and the push toward fuel and energy alternatives remains at the forefront of US priorities.
We cannot tax our way to lower gas prices
It’s almost comical if it weren’t so serious: no matter what the issue, Democrats today offer the same solution for all ills: raising taxes “on the rich.”
Of course, they’ll never stop to tell you that to be considered rich, by them, all you need is a two-income family where each spouse makes an average of $45,000, no matter how many or how few kids they have.
The gas price crisis is the latest example of liberals’ one solution fits all approach to life and politics. With the recent $4.00/gallon gas price crisis, instead of embracing domestic drilling, Dems led by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid both voted to go on vacation rather than act on any measure with real solutions for the problem.
Their solution, other than a couple weeks in Maui following a week in Denver? Raising taxes on domestic oil companies.
OK, other than lining their personal pockets, how exactly does that bring down the price of gas? It doesn’t; in fact, it would skyrocket oil prices by at least another 50 cents. That’s no solution for real, working Americans.
For decades, Democrats have coasted on the false cliche that Republicans are “for the rich” and Dems are “fighting for the little guy.” That’s just not true, and this is the latest example.
Dems are not fighting for “the little guy” by stonewalling domestic drilling; they’re not even proposing to punish the right people with their tax increase. (It’s OPEC, not domestic oil companies, who are setting the world supply and price levels, after all.)
No, they’ll fight for the Sierra Club, Algore’s zittoheads, teachers unions and whoever else comes along. But if they ever till you they’re “for the little guy,” remember that it’s the single mom of two, working two jobs and still unable to make ends meet with fuel prices so high, who’s the sort of “regular Joe or Jane” getting hurt most by $4.00/gallon gas.
Oh, and that whole rationale about domestic drilling not bearing anything fruit for “at least five to seven years?” Well, on the first part, it’s false; but even if it were true, shouldn’t that be even more motivation to begin efforts now?
After all, gas prices have nearly doubled in just under two years; just imagine where they’ll be if we continue sitting on our hands and taking no action for the next “five to seven years.” Democrats shouldn’t even be trusted to sell acne products competently.
Oil continues to ease back down
After months of pressure at the pump, the cost of oil continues to ease, thanks to lower demand – especially in the US – despite concerns like the fresh conflict between Russian and European Georgia. prices are down around $115.20 per gallon and seem to still be headed downward in early trading.
While many analysts are mystified by oil’s drop, the truth is that several months of unrelenting price increases had perched oil at an unmaintainable high benchmark, and all this is, really, is a market correction in the price.
Given the actual market dynamics, oil should be somewhere around $70-$80 per barrel; so although it may take a while, it would not be surprising to see oil continue to fall another $35-$45 per barrel before leveling off, though it may take three or four months to get there.
Right in time for the US elections? No, I doubt this is a big oil conspiracy; it’s more like a colon cleanse for an over-inflated market and where prices go after the US election will still depend more on market dynamics than election results.
Of course, an Obama victory would mean that any easing of prices at the pump could be replaced by a higher federal fuel tax – so watch out.
Iran claims 6,000 centrifuges
Look, no one is going to deny that even third-world countries like Iran have energy needs. The trouble with the recent announcement by Iran that they are now operating as many as 6,000 nuclear centrifuges is that their leader, President Mahmoud Ahmidinijad is still going around talking about how Israel will “soon disappear off the map.”
Any yet he expects world leaders to trust him and his country with nuclear technology? Hell, no.
Maybe if Iran ever grows up and elects a leader that doesn’t talk like, act like, and actually be a terrorist, maybe then we wouldn’t be so worried about them fueling their country’s energy needs with nuclear plants.
In the meantime… sorry, we just can’t trust ya any more than I can trust the purchase of office furniture to an inexperience intern.
Chavez predicts $300/barrel
Reuters is reporting that Venezuelan president Huge Chavez is predicting that if his country has further economic sanctions leveled against it, oil could rocket to $300 per barrel, which would send gas prices as high as $8.00 per gallon, or approximately twice the current market price.
Less talked about is Chavez’s admission that the current prices are the result of a speculative bubble which, if it bursts, could send oil prices crashing back down to as low as $70 per barrel and about $1.85 per gallon at the pump.
Sounds like Hugo’s playing it both ways so he can claim to be correct no matter what happens; but remember, WonderfulPessimist.com isn’t about to be outdone by a South American dictator. You read it here first two months ago: $500 per barrel, $22.50/gallon.
Our rationale? Well, hell, it’s as good and as based in fact as anyone else’s wild-ass guess, whether they live in the Middle East, the Outer Banks, Venezuela or Minnesota!
