gas prices

The Wall Street Surcharge On Your Gas Tank

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gas signHow much are you paying to fuel Wall Street oil speculators? A new, very timely St. Louis Federal Reserve research paper, Speculation in the Oil Market finds 15% of oil price increases are due to speculation and is the second most powerful mover of prices beyond actual physical demand. Demand itself accounts for 40% of the total oil price increase.

Why are Gas Prices Skyrocketing?

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Déjà vu, it's 2008 all over again. Why are gas prices soaring through the roof?

 

gas reg gal 02-2012

 

Some are revisiting oil speculation as the culprit. Commodity futures speculation always pops up in the public discourse the minute gas prices go above $3.65, yet nothing ever seems to come of it.

Our usual stupid political tricks, from tapping the strategic oil reserve to the GOP blaming Obama for gas prices, are in full swing. Isn't this all getting rather old? Wouldn't we all just like a stable price fluctuation in a key critical commodity upon which our economy and our empty pockets depend?

 

 

We know one thing, $5 gas can literally kill economic recovery. Oil shocks are correlated to recessions, as James Hamilton points out as do others. Below is a quarterly historical graph of real GDP percent change vs. the West Texas Intermediate average Oil Price. Notice the spikes in oil price and the grey recession bars.

 

Libya, Gas Prices, and the Big Payday at Your Expense

Another Triumph for The Money Party

Michael Collins
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The average price for a gallon of gas rose 30% from $2.69 in July 2010 to $3.49 as of March 6. Most of that 30% has come in just the last few days.

We're about to embark on another period of let the markets take care of it. The Money Party manipulators are again jerking citizens around in the old bottom-up wealth redistribution program. Their imagineers are writing the storyline right now.

The conflict in Libya is causing the spike in oil prices over the past ten days or so according to the media script. Take a look at the chart to the right. Can you find Libya among the top fifteen nations supplying the United States with crude oil?

Why the Current Panic Over Gas Prices?

The general explanation points to the crisis in Libya as the proximate cause. The anti Gaddafi revolution began in earnest on February 17. But if the Libyan revolution were the cause, we'd have to attribute a 50% drop in a 2% share of the world's oil supply as the cause of the panic. We would also have to attribute the increase in US gas prices to a nation that doesn't impact the US crude oil supply and, as a result, should not impact the price of gas here.