On 6/1/2022 at 11:37 AM, DarkandStormy said:

 

We are closing in on $5/gallon.

 

 

National average is now $4.86.  $5.09 seems to be everywhere in Columbus, fwiw.

13 hours ago, KJP said:

 

If you think price gouging is the problem you do not understand the problem. Here's a hint, it is not price gouging, it is a supply and demand problem.  Let's not support politicians that pander to people's stupidity

Edited June 8, 20223 yr by Brutus_buckeye

1 minute ago, Brutus_buckeye said:

If you think price gouging is the problem you do not understand the problem. Here's a hint, it is not price gouging, it is a supply and demand problem.  Let's not support politicians that pander to people's stupidity

This is correct and this is a both sides issue. Everyone is trying to score political points but fuel prices are rising world wide due to market forces. 

Not just supply and demand, but speculation and other factors.  Here is some more info:

 

https://www.investopedia.com/articles/economics/08/determining-oil-prices.asp

 

5 minutes ago, freefourur said:

This is correct and this is a both sides issue. Everyone is trying to score political points but fuel prices are rising world wide due to market forces. 

Correct. It is not just the Keystone pipeline or Putin or corporate greed. Gas prices would be high if Trump were in office too. 

It was the combination of the pandemic and demand destruction along with the quick recovery that is the primary driver of this. Putin plays a small role with the Ukraine thing. I would say the administration bears a little responsibility for some of their forward statements on green energy causing the depression of supply, but with gas at $5 gallon, the admin's blame accounts for like $.10-25 cents of it (IMO). If you want to put any blame on corporate price gouging assign another ($.10-$.15) to the problem if that will make some people happy.  So at the end of the day, after assigning blame and feeling better about the scapegoats, gas is still $4.50-$4.75/gallon.  Gee I feel a lot better knowing who to blame now, lol.  

^  Oil/energy markets get spooked very easily and the admin's green energy policy did just that.   So I think your estimate for the admin's blame might be a bit low.

1 minute ago, LibertyBlvd said:

^  Oil/energy markets get spooked very easily and the admin's green energy policy did just that.   So I think your estimate for the admin's blame might be a bit low.

 

But there is no green energy policy. Nothing has been passed. 

20 minutes ago, freefourur said:

 

But there is no green energy policy. Nothing has been passed. 

 

A policy is not a law, it's an intent to make laws.

40 minutes ago, LibertyBlvd said:

Not just supply and demand, but speculation and other factors.  Here is some more info:

 

https://www.investopedia.com/articles/economics/08/determining-oil-prices.asp

 

 

Speculation can fuel price increases if all the speculators agree that the price will move in a single direction--they effectively become a self-fulfilling prophecy.  This can happen in a downward direction, too (this is what a short attack on a stock involves, too).  But speculation won't have a huge impact if there's anything close to a real balance between speculators betting on future increases and speculators betting on future decreases.

 

I don't have any great data sources for futures markets, but I'd be surprised if the market is truly dominated now by speculators betting on the market going even higher than the $5 it's already hit.

 

Also remember that speculators can absolutely lose their shirts because the futures market cannot move the underlying market forever, so even if >90% of speculation bets on increased prices but the underlying market fundamentals move against them, speculators can get annihilated.  And speculators know this, which can lead to a massive stampede to the exits if the market has leaned too heavily in one direction and then any bad (from the speculators' perspective) news hits, especially if speculators are also overleveraged/overextended on those positions.  In the short/medium term, another major COVID outbreak that torpedoes both leisure travel and also slows or reverses some corporations' and executives' zeal to bring their employees back to the office in person could ice a lot of the futures market, if it's over-leaning in one direction.  (That said, because of those risks, which don't exactly need an Econ Ph.D. from the University of Chicago to see, I'd be surprised if the futures market is leaning so heavily to one side as to influence the underlying market.)

 

The more straightforward, Occam's-Razor-friendly explanations are that (a) people are traveling more again for leisure (especially as summer gets underway); (b) more employers are trying to turn employees back into daily commuters; and (c) the absolute gusher of federal money printing will increase the price levels of all commodities, since commodities are an archetypical "real value" item.

 

The monetary inflation effect is probably significant at this point, accounting for a large part of the increase but not all of it.  The best control for this is to look at commodities that were less affected by the pandemic.  Oil is an unproductive example (it's just the one everyone wants to talk about) because people really did use much less oil in 2020 because of the pandemic, with travel bans and lockdowns and quarantines.  However, the average price of cotton was $0.67/lb in 2019 and it's $1.31/lb so far this year (https://www.macrotrends.net/2533/cotton-prices-historical-chart-data); I don't think people bought substantially fewer clothes in 2020-2021 (though in the era of the Zoom meeting, maybe I'm wrong ...).  Corn went from $3.85 to $7.18 per bushel.  Iron ore increased by about 45% over that 3-year period.

 

None of that compares to oil prices, which actually went negative for a brief moment during the early 2020 lockdowns.  But that's one reason oil price history is a bad marker for overall commodity inflation.

I remember the 1970's with the move to smaller cars because of gas prices.  There were news stories with people pushing their cars in line at the gas pump to save on gas.  And now generally the cars are much larger, and I see people all the time sitting in their car with the engine running just to keep the AC on.  Seems like people like to complain but continue to buy gas guzzlers.  I heard on the news a guy complaining that it cost him over $100 to fill up his tank.  That means his gas tank is over 20 gallons!  I've never had a car with a tank larger than 10.  

5 hours ago, Brutus_buckeye said:

Correct. It is not just the Keystone pipeline or Putin or corporate greed. Gas prices would be high if Trump were in office too. 

It was the combination of the pandemic and demand destruction along with the quick recovery that is the primary driver of this. Putin plays a small role with the Ukraine thing. I would say the administration bears a little responsibility for some of their forward statements on green energy causing the depression of supply, but with gas at $5 gallon, the admin's blame accounts for like $.10-25 cents of it (IMO). If you want to put any blame on corporate price gouging assign another ($.10-$.15) to the problem if that will make some people happy.  So at the end of the day, after assigning blame and feeling better about the scapegoats, gas is still $4.50-$4.75/gallon.  Gee I feel a lot better knowing who to blame now, lol.  

In other words, every Republican voted against cutting gas prices by $.10-25 cents.  Why?  Because it is a small problem?  (That doesn't stop Republicant whining about voter fraud.)

1 hour ago, Jimmy Skinner said:

I remember the 1970's with the move to smaller cars because of gas prices.  There were news stories with people pushing their cars in line at the gas pump to save on gas.  And now generally the cars are much larger, and I see people all the time sitting in their car with the engine running just to keep the AC on.  Seems like people like to complain but continue to buy gas guzzlers.  I heard on the news a guy complaining that it cost him over $100 to fill up his tank.  That means his gas tank is over 20 gallons!  I've never had a car with a tank larger than 10.  

 

Generally as the size of the vehicle goes up the MPG goes down and the size of the fuel tank increases to give most of them a range of 350-450 miles. Some pickup trucks can hold over 30 gallons.

Crose-posted from General  Transit thread:

 

Gas prices causing an increase in transit usage in some areas. 2 examples: Santa Fe 

 

https://www.santafenewmexican.com/news/local_news/high-gas-prices-force-santa-feans-to-limit-trips-add-riders-to-the-rail-runner/article_582823e8-eb58-11ec-8807-3b1f44feef08.html

 

Sacramento:

 

https://sacramento.cbslocal.com/2022/06/14/sacramento-gas-prices-soar-public-transit/

And employers are still wanting to limit remote work, with current and upcoming mass layoffs to give them more leverage.

 

They couldn't give a flying f-k about employees' commuting expenses tripling from last year. 

Blame Sprawl for High Gas Prices:

 

Over time, auto dependence became so ingrained as to seem normal. We put up with the cost of transportation surpassing the cost of food. We accepted the ugly crudscape of drive-throughs, big-box stores, and seas of parking. We internalized the stresses of road rage and commuting ennui. We relegated those who couldn’t drive (too young, too old, too poor or disabled) to second-class citizenship. We continued to widen highways to pharaonic scales, inducing more demand in a doomed effort to escape congestion. Despite occasional dips for recessions or global oil shocks, U.S. consumption of gas rose inexorably, from 50 billion gallons annually in the 1950s to 100 billion gallons by the early 1970s, climbing to nearly 150 billion gallons in 2019.

 

https://commonedge.org/blame-sprawl-for-high-fuel-prices/

Four Ohio cities are in the TOP TEN

 

Jul 14, 2022 - Economy & Business

Your commute is hundreds of dollars more expensive this year

Cities with the highest percentage change in annual commuting cost

 

Rising prices for gas and auto insurance mean the average American is now paying $2,914 a year to commute, up $757 — or 35% — from last year, according to a new report.

 

Why it matters: The sheer expense of getting to work is not just hurting our bank accounts — it's contributing to wrangling between workers and employers over returning to the office.

 

MORE:

https://www.axios.com/2022/07/14/commuting-costs-gas-prices-inflation

For many, the alleged "positive workplace culture" > paying more at the pump daily for unnecessary commutes.

 

I guess people can look for side hustles to help make up the difference. Sleep, hobbies and spending time with family/friends are overrated.

 

Gas is 60 cents more a gallon in Lancaster than Groveport.

11 hours ago, KJP said:

Four Ohio cities are in the TOP TEN

 

Jul 14, 2022 - Economy & Business

Your commute is hundreds of dollars more expensive this year

Cities with the highest percentage change in annual commuting cost

 

Rising prices for gas and auto insurance mean the average American is now paying $2,914 a year to commute, up $757 — or 35% — from last year, according to a new report.

 

Why it matters: The sheer expense of getting to work is not just hurting our bank accounts — it's contributing to wrangling between workers and employers over returning to the office.

 

MORE:

https://www.axios.com/2022/07/14/commuting-costs-gas-prices-inflation

 

I'm not sure I buy their methodology. I surely don't know anyone in Cincinnati who has seen their commuting costs go up 59%. That's an insanely high number. Their methodology also looks like it assumes everybody commutes everyday in a a single-occupancy car. My commute cost on my bicycle hasn't gone up at all.