Saturday - November 01, 2014

Middle of the Night posts: Gas is Cheap

Man oh man, you know we’ve been living with over the top prices for too long, when the price of gas finally drops to merely only a dollar a gallon more than what it ought to cost, and the news articles are asking “What does this mean?” Well, to be short, and crude, it means the trickle down has gone down your leg and is forming a puddle on the floor. In terms of world economics.

Around our end of Hunterdon County, and up into Warren County, regular gas, cash price, around $2.69/gal now. That’s down $0.06 since last week, but a month ago it was over $3, and hadn’t been below that since ... forever? Since Bush? Seems like.

( I don’t know about you, but my car runs like crap on milk. )

NEW YORK – The sight is so surprising that Americans are sharing photos of it, along with all those cute Halloween costumes, sweeping vistas and special meals: The gas station sign, with a price of $2-something a gallon. [ really? Those New Yorkers must be visiting New Jersey. NY’s 75¢/gal tax will keep their gas way over $3 for a long time to come. What cracks me up is that if the price really bottoms, and the rest of us are paying $1.50, NY gas will still be >$2, and the people just might realize for once how seriously their state is sticking it to them at the pump; at that price, the state tax is a solid third of the pump price. Add in the fed tax, and we’re looking at just about half. Sucks, huh? ]

“It’s stunning what’s happening here,” says Tom Kloza, chief oil analyst at the Oil Price Information Service. “I’m a little bit shocked.”

The national average price of gasoline has fallen 33 cents in October, landing Friday at $3.00, according to AAA. Kloza said the average will fall under $3 by early Saturday morning for the first time in four years.

When the national average crossed above $3 a gallon in December of 2010, drivers weren’t sure they’d ever see $2.99 again. Global demand for oil and gasoline was rising as people in developing countries bought cars by the tens of millions and turmoil was brewing in the oil-rich Middle East.

Now demand isn’t rising as fast as expected, drillers have learned to tap vast new sources of oil, particularly in the U.S., and crude continues to flow out of the Middle East.

Seasonal swings and other factors will likely send gas back over $3 sooner than drivers would like, but the U.S. is on track for the lowest annual average since 2010 — and the 2015 average is expected to be lower even still.

Here are a few things to know about cheap gas:

— Crude prices came off the boil. Oil fell from $107 a barrel in June to near $81 because there’s a lot of supply and weak demand. U.S. output has increased 70 percent since 2008, and supplies from Iraq and Canada have also increased. At the same time, demand is weaker than expected because of a sluggish global economy.

— In the past, a stronger economy in the U.S., the world’s biggest consumer of oil and gasoline, typically meant rising fuel demand. No longer. Americans are driving more efficient vehicles and our driving habits are changing. Michael Sivak of the University of Michigan Transportation Research Institute calculates that the number of miles traveled per household and gallons of fuel consumed per household peaked in 2004.

The article goes on further, but those first two points cover it:

* Despite all of Obola’s efforts to stop drilling and fracking, US oil companies are tapping into massive quantities of new hydrocarbons. And while this is great, and where the energy stimulus money OUGHT to have gone (new refineries, Keystone XL, etc) to make America stronger, right now Obamanomics (tax and spend, borrow and waste, steal and bloat) is helping flatline the whole world.

* While some of us do have newer, more fuel efficient vehicles, a huge number of us no longer have jobs, or the Big Career job that was worth the Big Commute. The Walmart is right here on the other side of town, within bicycle distance if the weather isn’t too bad. Did you want paper or plastic?

Oh, and milk? Beats me. It’s 4 in the morning. Go read the article. Milk prices suck, having tripled in teh past 5 years I think. She-it, a friggin’ quart here costs $1.99 I think. If I don’t think about it, my brain wants to tell me that milk costs $2.49/gal. And I know that’s a few years out of date.

Gasoline is cheaper than milk again. In September the national average price of milk was $3.73 per gallon. The annual average for milk is on track to be more expensive than the annual average for gasoline for the first time since 2011.

Fine. What-evs. I can remember milk at 79¢/gal, but that’s ancient. I know that $15 used to fill up my 1997 Saturn’s 12 gallon tank at some point, and that was with real gasoline, not this wimped out ethanol added crap. But I’ll get on board here: let’s get gas down to $1.29/gal. And milk back to $1.49. Because honestly, only cheap food, cheap fuel, and lower taxes are going to get the economic fires burning again.

Posted by Drew458     on 11/01/2014 at 02:53 AM   
Filed Under: • Economics • Inflation and High Prices • Oil, Alternative Energy, and Gas Prices •  
• Comments (4) • Trackbacks(0)  Permalink •  

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