Got Gas? U.S. Economy to Worsen as Gas Prices Skyrocket

[WhipperSnapper]

I just read a good CNN-Money article about gas price differences between the states. Some of it is due to state and local taxes, some to the distance from refineries, and (new to me) some of the price difference is due to the source of the oil. Alaska supposedly has the nation's lowest state tax but one of the highest prices because the (Alaskan) oil that is used is supposed to be of lower quality or is more difficult to transform into gasoline.

Gas: Why I'm paying $4 but my neighbor isn't

 

[Engineer]

http://money.cnn.com/2011/03/01/news/companies/gas_price_hike_impact_on_february_auto_sales/ SUV sales up

Damn, it's not working

Sad...but the fact remains that US oil consumption is down 11% from 2007. The rest of the world may be up more than enough to make up for that though..not sure.

 

[bfdd]

Sad...but the fact remains that US oil consumption is down 11% from 2007. The rest of the world may be up more than enough to make up for that though..not sure.

Well they'll be able to knock down my usage soon. Getting rid of my truck and going to take the bus for awhile. damn near 900 a month for payment, insurance and gas(+other up keep costs) vs 84 dollars a month for a bus pass. I think I'll take another shot at learning to ride the bus, because that's a crap load more loot in my pocket.

 

[AznAnarchy99]

Well they'll be able to knock down my usage soon. Getting rid of my truck and going to take the bus for awhile. damn near 900 a month for payment, insurance and gas(+other up keep costs) vs 84 dollars a month for a bus pass. I think I'll take another shot at learning to ride the bus, because that's a crap load more loot in my pocket.

Sold my Mitsubishi Eclipse which had 20mpg highway and got a Civic with 36mpg highway. I have a car payment now but its still better than filling up twice a week at $60 a tank.

 

[bfdd]

Sold my Mitsubishi Eclipse which had 20mpg highway and got a Civic with 36mpg highway. I have a car payment now but its still better than filling up twice a week at $60 a tank.

I don't even drive around extra for the most part because it costs me like 10 dollars a day to drive to and fro from work now. 50 bucks a week in gas. ugh. I'll just get rid of the payment, don't care what they do with it. I'll pay the difference between it's value and what I owe and then no payment. Couple months I'll be able to buy an older gas saver and I'll barely drive that. It will be nice.

 

[Imp]

National average was $3.519 this morning, before the last pop up in oil. However, with Obama considering letting oil out from the national reserve, oil prices "may" stabilize for a day or two. We'll see....again, too much money trying to "trade" oil instead of buying it for usage...

Same thing that happened to housing a few years ago.."Flip this House" is now "Flip this Oil".

http://finance.fortune.cnn.com/2011/03/07/speculators-double-down-on-oil/

Virtually no supply problem worldwide. Libya produces 2% or 3% of the world's supply, and supplies Europe mainly. Estimates are that production is down 50% in Libya, and last I checked, fighting a war and buying guns cost money, so it won't just stop flowing unless someone's stupid enough to blow up a facility or two. Yay speculators...

 

[Ozoned]

How much would you pay to not walk 25 miles?

 

[QuantumPion]

Sold my Mitsubishi Eclipse which had 20mpg highway and got a Civic with 36mpg highway. I have a car payment now but its still better than filling up twice a week at $60 a tank.

So let's see, before you were driving $120/$4/gal = 30 gals * 20 mpg = 600 miles per week. Now you are paying 600 mi / 36 mpg = 16.6 gal * $4/gal = $66 per week, thus saving $66x4=$264 per month. Is your car payment substantially less than $264 per month? If not, then it is demonstrably not better than filling up twice a week at $60/tank. :hmm:

 

[TheSlamma]

So let's see, before you were driving $120/$4/gal = 30 gals * 20 mpg = 600 miles per week. Now you are paying 600 mi / 36 mpg = 16.6 gal * $4/gal = $66 per week, thus saving $66x4=$264 per month. Is your car payment substantially less than $264 per month? If not, then it is demonstrably not better than filling up twice a week at $60/tank. :hmm:

When gas hits $5 a gallon then what will his savings be then?

Also the cost of owning a Honda in the long run will be way cheaper then a Shitsubishi

 

[AznAnarchy99]

So let's see, before you were driving $120/$4/gal = 30 gals * 20 mpg = 600 miles per week. Now you are paying 600 mi / 36 mpg = 16.6 gal * $4/gal = $66 per week, thus saving $66x4=$264 per month. Is your car payment substantially less than $264 per month? If not, then it is demonstrably not better than filling up twice a week at $60/tank. :hmm:

$200 a month. Couple of other considerations that I took into account. My Eclipse was getting to that point where heavy maintenance was going to be required. It was a 2000 Eclipse that I got from my dad and he barely put 40k miles in 9 years. I put 20k in one year. The transmission was going through same bad problems (every time I put the car into reverse, pressure would build up and cause the entire engine to shake. It repeatedly broke the engine mounts) and the timing belt was getting close to the time to be replaced. I didnt really want to put in hundreds to thousands of dollars in a car that is worth less than 5k on KBB.

I got a Honda Civic with low mileage for the fact that I will be doing this commute for another 2-3 years. Hopefully, in the long run it will save me gas and cost me little to keep it running.

 

[WhipperSnapper]

I spend a couple seconds thinking about whether or not I really need to make a trip now. At about 30 mpg (or 12 cents/mile at $3.60/gallon) you really have to ask whether that 10 mile round trip to Walmart ($1.20) to pick up a few items at a time is worth it. Ten years ago this type of consideration wouldn't have come to mind at all.

 

[dmcowen674]

I spend a couple seconds thinking about whether or not I really need to make a trip now.

At about 30 mpg (or 12 cents/mile at $3.60/gallon) you really have to ask whether that 10 mile round trip to Walmart ($1.20) to pick up a few items at a time is worth it.

Ten years ago this type of consideration wouldn't have come to mind at all.

Yet you have Rocket Scientist Economists and forum Republicans insisting that there will be no effect on the economy. They are clearly on drugs.

 

[Zebo]

Huge effect on economy if input costs are up which are effectively a tax on production putting pressure downward on wages due to razor thin margins companies operate under. Wages, which buy things and create demand in the first place. Since oil is our whole economy and everything in it rising prices will cripple the whole economy and everything in it.

 

[dmcowen674]

Huge effect on economy if input costs are up which are effectively a tax on production putting pressure downward on wages due to razor thin margins companies operate under. Wages, which buy things and create demand in the first place.

Since oil is our whole economy and everything in it rising prices will cripple the whole economy and everything in it.

How can that be when all the "experts" are saying it won't affect the economy?

Who is lying?

 

[ElFenix]

How can that be when all the "experts" are saying it won't affect the economy?

Who is lying?

who is saying it won't affect the economy? seems like you're the one lying.

 

[QuantumPion]

$200 a month. Couple of other considerations that I took into account. My Eclipse was getting to that point where heavy maintenance was going to be required. It was a 2000 Eclipse that I got from my dad and he barely put 40k miles in 9 years. I put 20k in one year. The transmission was going through same bad problems (every time I put the car into reverse, pressure would build up and cause the entire engine to shake. It repeatedly broke the engine mounts) and the timing belt was getting close to the time to be replaced. I didnt really want to put in hundreds to thousands of dollars in a car that is worth less than 5k on KBB.

I got a Honda Civic with low mileage for the fact that I will be doing this commute for another 2-3 years. Hopefully, in the long run it will save me gas and cost me little to keep it running.

Ah ok then, the reduced maintenance costs makes it worth it. I made the opposite choice, going from a civic to a v8 mustang. I want to have fun and use up the gas while I still can (before obama outlaws internal combustion engines or something).

 

[dmcowen674]

Originally Posted by dmcowen674
How can that be when all the "experts" are saying it won't affect the economy?

Who is lying?

who is saying it won't affect the economy? seems like you're the one lying.

Do you look at anything besides here?

All the talking heads including CNN keep saying everyday the don't expect gas prices to hurt the economy.

Some today are now starting to say that past $110 per barrel may have some affect

3-7-2011

http://www.businessweek.com/news/20...y-trigger-pain-u-s-ceos-weathered-at-100.html

Oil at $110 May Trigger Pain U.S. CEOs Weathered at $100



A recovering economy helped U.S. chief executive officers weather crude’s surge past the $100 mark. At $110 a barrel, the pain would start to kick in.

“Any time something like oil goes up dramatically overnight, it becomes very hard to adequately plan,” said Samuel Allen, 57, chairman and CEO of Deere & Co., the world’s largest maker of agricultural equipment. “It has caused us to be more careful or cautious in watching the outlook, but we have still moved forward with all our plans.”
Corporate assumptions would have to start changing when oil reaches $110 a barrel, according to economists such as Chris Low of FTN Financial in New York. Crude at that price would offset the benefit from the tax cut approved by Congress in December, and begin to slow economic growth, Low said.

 

[ElFenix]

http://www.businessweek.com/news/20...y-trigger-pain-u-s-ceos-weathered-at-100.html

did you even read the article you link? nearly all of it is what the negative effects of increasing price has on the economy!

 

[Zebo]

I just read a good CNN-Money article about gas price differences between the states. Some of it is due to state and local taxes, some to the distance from refineries, and (new to me) some of the price difference is due to the source of the oil. Alaska supposedly has the nation's lowest state tax but one of the highest prices because the (Alaskan) oil that is used is supposed to be of lower quality or is more difficult to transform into gasoline.

Gas: Why I'm paying $4 but my neighbor isn't

Taxes ME affairs refineries my ass. Reason gas is up is same reason cotton, gold or anything else producers make save china trinkets who fixes their currency to ours: Benny the B's destruction of dollar

Seems people with control of means of production don't dig thier share/labor/dollars being devalued and charge for it.

 

[PoAT.PaN]

I think this precisely the reason why Green Energy solutions are being looked at. If we have a resource that never runs out (solar, wind, tidal, geothermal) we will never be at the whim of the oil producing countries. I think it would be prudent to responsibly tap into our domestic fossil fuel reserves to fuel the transition to non-fossil fuels. Once a non-fossil fuel system is in place, we suddenly become much more stable. We need to balance the needs of the country, the economic costs, and environmental costs to find the best solution.

 

[Londo_Jowo]

I think this precisely the reason why Green Energy solutions are being looked at. If we have a resource that never runs out (solar, wind, tidal, geothermal) we will never be at the whim of the oil producing countries.

Do you know how much power in the US is derived from oil? Less than 1%.

 

[The-Noid]

Taxes ME affairs refineries my ass. Reason gas is up is same reason cotton, gold or anything else producers make save china trinkets who fixes their currency to ours: Benny the B's destruction of dollar

Seems people with control of means of production don't dig thier share/labor/dollars being devalued and charge for it.

I don't think it is as much the dollar as it is net non-commercial spec interest (myself included). There is a certain dollar destruction mantra to investing in many of the commodities underlying the futures, however most of the contracts aren't deep enough to accept the huge amount of liquidity that has been bestowed on them.

Net non commercial specs were at 7,500 contracts in the summer of 2008 when oil hit $148ish. How much did we hear about how it was all caused by speculation at that point? Here we are 3 years later with basically a limp-dick investigation that went on and we are in the same place. No one wants to investigate when the bottom dropped out. We are now close to 30,000 contracts from non-commercial net specs. Run through every commodity and view the huge net-spec interest compared to 5-10 years ago or the huge increase in volume run rates over the last 10 years, which doesn't even include the oil swap and forward OTC market.

Traders know this they just don't want to talk about it. The price is up due to speculation and the huge amount of implied leverage in the contracts. That is why changes in margin requirements have no effect at this point. Without a blow off top there isn't enough money to kick most people out of these commodities. Equity vol is dead thanks to QE1/2, only vol left is it commodities and FX.

Position limits, new market splitting hedgers from net non spec, regulation or ??? there does need to be something done however because as much as everyone wants to make commodities into a buy and hold asset class they simply aren't.

 

[PoAT.PaN]

If you're talking about general electric production then yes, petrols are not used in the US for electric production (Coal, Nuclear, Natural Gas are), but almost all of our transportation, a lot of industrial machinery, and residential heating uses petrols. This thread is about gasoline prices, if our cars don't run on gasoline, we don't take a dive when there are shortfalls in supply. All green energy methods are production methods however, and corresponding work needs to be done on the storage side with ultra capacitors and hydrogen conversion to fully make the transition.

 

[Doppel]

I think it would be prudent to responsibly tap into our domestic fossil fuel reserves to fuel the transition to non-fossil fuels.

It would be, if this were realistic. The US has been expanding use of oil for many decades while putting scant little effort into alternatives. And this is the price paid, behind at the whim of dictators and scoundrels.

 

[Engineer]

Do you know how much power in the US is derived from oil? Less than 1%.

You made his point. If we were to switch our gasoline/oil using vehicles to those that could be charged or run by items made by the US using our electricity, which could be renewable, we would be far better off.