in Huntsville. IIRC, that's the closest I've seen to $4.00. With the ADP report set to show lower than expected job grow, the President better enjoy this slight victory tour.
Last time it happened the President was accused of being in the pocket of 'big oil'. Use google if, you have selective amnesia. Remember this visionary plan on how to stop high gas prices? Notice the $3.55/gal, in the background. Those were the days. Obama promises
Hearing people blame politicians for high gas prices is like a guy from Iowa blaming politicians when he sees the high cost of real estate in Manhattan- it's supply demand baby. This is a 100 year story taking place now, supply is peaking, the Saudis are reducing production during high gas prices, they are drilling off shore, 2/3 of American permits go unused- and the Fed is awarding more drilling permits all the time (new auction was last week- as noted in the Volt thread, first post.) The USA peaked in production in the 1970's- 40 years ago already. If you don't like high gas- sorry, it's never getting better. Figure out how to use less, or something else to travel.
Oil is traded in dollars and unfortunately our dollar is historically weak. Our debt chickens have come home to roost.
Supply less than 2005 levels. The dollar is but a small part of this.. And here is demand- a very clear trend here. Econ 101.
According to numbers from the U.S. Energy Information Administration (USEIA) as of April 21, the U.S. had 363.1 million barrels of available oil. That compared to 357.8 million barrels at the same time in 2010. Keep in mind that a year ago, the U.S. was struggling with the aftermath of the Gulf oil spill. According to the USEIA the average cost of a gallon of regular gas on April 25, 2010 was $2.85. April 25, 2011 the price had risen to $3.88. That is an increase of $1.03 (36%) per gallon during a period when oil supplies have been stable and have actually seen a slight increase. marketowl
The fed's policy of QE is driving inflation, which is primarily seen in the rising costs of basic commodities, like oil. The price increase in oil and gas further drives inflation by increasing the price of basic food supplies (and everything else) due to increased shipping and production costs.
Guys- no one here is saying the dollar is strengthening- it is weakening as you note. The issue is- as a net importer, some people are implying this is the only reason gas prices are increasing. It is not- and is not the primary factor- supply demand is. I posted 2 very strong graphs, supply, and demand. More people are requesting the same or less amount of fuel- more bids per less gas. This is an easy one to figure out.. just look above. People don't see 2 billion developing people now using more gas/capita- but, they still exist.
We all understand supply and demand affects on oil pices, but there's more to this. From the chart I posted, look at the oil prices from Jun-Oct, did worlds thirst for oil suddenly dry up or was it because the dollar was strong. I'm going to go with the dollar was stronger last summer.
Brotha- This is easy to solve- use excel and come up with the correlation. Your stats professor would be thrilled! I do notice several months where both the dollar fell- as well as oil- so clearly, the correlation ain't 1!
Slow day at work- just found the correlation of the USD/EUR with oil prices Since 1999, it is .199, that is not very strong. In 2010, it was .54, a little stronger. If it was "1.0"- that is perfect correlation, as some of the earlier posts in this thread imply they think it is.
Thanks for that info McBrett, it is interesting to see what the exact numbers are. I would have thought it was higher. However, from possibly the same place, you got your graph.
the rising oil prices are based on a number of things, the dollar being one, you have middle east issues, you have increased global demand, etc. these prices are also based on expected future prices. i expect for the price to go up grandually unti it reaches its tipping point again like it did in 2007 whyen it reached 147 per barrel. the price will then go down or the worlds economies will collapse.
big oil doesn't control the price of crude oil. Big Oil (exxon, shell, bp, etc) only make about 7-8 cents profit a gallon. the bulk of what you pay per gallon goes to pay for crude oil itself, then taxes, refinining and transportation. demand and dollar value (and economic policy that affects the dollar) is what is driving crude oil prices right now ... as well as some speculation.
Obvoiusly there are many, many factors affecting world economies, and the POTUS can do little to affect the price of gasoline. That said, everything this President has done, like skyrocketing our national debt, only pushes the price upward. Now Eric Holder will investigate. F-ing Awesome!
I just think it is funny that it was Big Oil and the VP and Pres driving up prices. Now that there is a new VP and Pres. the cause has shifted and the same people who once blamed Bush and Cheney now want to use logic. I get it. I just find it disgusting as it is hard to argue with hypocrits and liars.
Well one point that is missed there is that the companies commonly referred to as "Big Oil" really aren't "big" when compared to the giants in the global market. As such, they don't control much.
