Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
Stock Market Re-Testing Overhead Resistance - 30th May 16
David Cameron Questioned on Out of Control Immigration at TEN TIMES Conservative Election Pledges - 30th May 16
Bitcoin Price Skyrockets And Is Now Up More Than 100% This Jubilee Year - 30th May 16
This Is Not The America My Parents Immigrated To In 1957 - 30th May 16
“Debt, Not The Economy, Reaches Escape Velocity” With Graham Mehl - 29th May 16
EU Referendum, Black Vote LEAVE or REMAIN? Which is Worse for Racism for Britain's Ethnic Minorities? - 29th May 16
Billionaire Gross: Jubilee Debt Relief as Prelude to New Global Economic Order - 29th May 16
Wargaming North Korea - Assessing the Threat - 29th May 16
EU REMAIN Population Forecasts - England 4.1 million Explosion, London Migration Crisis - 28th May 16
A Guide to the Trump-Sanders Debate - 28th May 16
Gold And Silver – At Significant Support. New “Story” Developing - 28th May 16
The Next Systemic Lehman Event - New Scheiss Dollar & Gold Trade Standard - 27th May 16
Energy and Debt Crisis Point to Much Higher Silver, Metals Prices - 27th May 16
Gold Junior Stocks Q1 2016 Fundamentals - 27th May 16
These Crisis Markets Are Primed to Deliver Big Gains, Platinum Never Cheaper! - 27th May 16
Operation Black Vote BrExit Warning for the Wrong EU Referendum - 27th May 16
UK Immigration Crisis Hits New Extreme, Catastrophic ONS Migration Stats Ahead of EU Referendum - 27th May 16
Many of the World’s Best Investors Made Their Fortunes This Way…And You Can Too - 27th May 16
The Ugly Truth About Stock Market Manipulation and Gold Prices - 27th May 16
Gold Price Looking Vulnerable While Gold Stocks Correct - 27th May 16
The 5 Fatal Flaws of Trading - 27th May 16
The Next Big Crash Of The U.S. Economy Is Coming, Here’s Why - 27th May 16
A New Golden Bull or Has the Market Gone Too Far Too Fast? - 27th May 16
It Feels Like Inflation - 26th May 16
Negative Interest Rates Set to Propel the Dow Jones to the Stratosphere? - 26th May 16
S&P Significant Low has Occurred – Not Likely! - 26th May 16
Statistics for Funeral Planning in UK Grave - 26th May 16
Think Beyond Oil And Gold: Interview With Mike 'Mish' Shedlock - 26th May 16
Hard Times and False Mainstream Media Narratives - 26th May 16
Will The Swiss Guarantee 75,000 CHF For Every Family? - 26th May 16
Is There A Stocks Bear Market in Progress? - 26th May 16
Billionaires Are Wrong on Gold - 26th May 16
How NOT to Invest in the Gold Market - 26th May 16
The Black Swan Spotter...Which Saw the Oil-Crash coming; now says the “Invisible Hand” will push Brent to $85 by Christmas - 26th May 16
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Gas Prices as an Indicator of Energy Costs

Commodities / Gas - Petrol Feb 29, 2012 - 10:22 AM GMT

By: BATR

Commodities Best Financial Markets Analysis ArticleThe consumer does not need more reminders about the pain experienced with every fill up at the pump. The drain on your pocketbook is growing. During economic dislocation and diminished vitality any prospects of a turnaround dim as gas approaches $4.00 a gallon and beyond. Been here before and the idea that this time the economy will be less effected is unreasonable. The cost for all energy is rising but the impact of gas prices has a personal burden on everyday budgets. The Price of Fuel provides a useful synopsis.


"While crude oil is traded in a global market, gasoline is part of a regional market . . . The price of crude oil may account for over half the price of a gallon of gasoline.

Transitions in supply can also affect the short-term availability of gasoline. Going into the peak summer driving season, refineries are adjusting their gasoline formulas . . . and many states are switching to ethanol-blended gasoline.

Many states require specific formulations of gasoline - there are currently 18 separate gasoline formulas for different regions of the country-and it is often difficult to import gasoline supplies from one region to another.

Each gallon of gasoline also is subject to numerous taxes and fees, which vary by state.

After the crude oil is processed through the refinery, the finished gasoline product is transported to a terminal, where it may be sold to a wholesaler for distribution to the wholesaler's retail network or delivered to the retail location. There the retailer sets the "street price".

Now these factors are the industry’s explanation that establishes the price. But, we all know that there are few commodities that are more manipulated than crude oil. The Business Insider adds this viewpoint in Here's The REAL Reason Gasoline Prices Have Been Surging In The US

"You may have heard that the price of a barrel of oil is around $109, but actually that's the US domestic West Texas Intermediate price of oil. A better international benchmark is probably Brent Crude, and that's now well over $120/barrel, having surged all year.

The problem with judging the global pace of oil demand growth is that the epicentre of that growth has most definitely moved away from the US to Asia, and China in particular. Yet, due to the lack of prompt alternatives, the more readily available oil data from the US is still used as a global guide to the health of the oil markets."

Another article in BI suggests the worse, Gas Could Easily Go To $5 And Crush The National Economy.

"The USA has evolved into a two-tier gas market. The supply of crude from Canada and the Bakken fields has created a lower cost of supply for the central portion of the country. This differential is most notable in the market spread between WTI (a futures contract that settles physical delivery in Oklahoma) and LLS (Louisiana Light Sweet Crude) - the pricing of crude for the big Gulf refineries."

The conclusion from these factors suggests that the domestic retail price of gas varies for the reasons stated. The level of hurt is based upon needs to use individual transportation; however, the added cost for moving consumer goods is experienced by all in the added charged at the register. Published government inflation rates are skewed to tap down actual increases.

Anyone buying into replacing gasoline for personal vehicles as the most efficient cost form of energy denies the practical. Diesel as a fuel for over the road eighteen-wheelers may be the most promising for conversion to natural gas. Honda has a CNG version for automobiles. Gasoline will be around a lot longer than any hybrid or electric car. The reason is unmistakable, the lowest cost fuel that equates to identical vehicle performance, wins the battle in the marketplace.

In spite of this aspect of business, the government and their corporate partners are pushing to force a conversion away from gasoline. No better example of the "Yugo Syndrome" is the Government Motor’s Volt. The failure to sell consumers on a ridiculous car is clear.

Chevy Volt Fleet Sales Rise, Government GM Purchases Increase

"According to GM, 992 of the Volts sold were to retail customers while 537 went to fleet purchasers.

Government purchases of GM vehicles rose 32% from last year. This represents yet another conflict as the Obama Administration has a vested interest in GM's success as it spends more taxpayer dollars to help support the company as 2012 elections near."

Even the favorite Obama corporate collaborator, General Electric, uses its muscle to cover-up the botched venture. GE "Forcing" Employees Into Chevy Volts reports,

"A memo leaked to Green Car Reports lays out GE’s plans for their new fleet of Volts, and as expected, it has some people crying foul.

The memo, sent to employees of GE Healthcare Americas team explains that all sedan, crossover, and minivan purchases in 2012 will be replaced by the Chevy Volt. Only field engineers are exempt from having to drive a company Volt.

GE will offer estimates for installation Level 2 Charging Stations, though all-gas use will be allowed when there is no electric option. Any employees who opt out of the Volt program will not be compensated for their expenses."

One cannot ignore the economic cost of failed and foolish "Green Energy" projects. The idea of forced buying expensive and government subsidized vehicles in the future borders on irrational paranoia. The environmental "true believers" in the global warming hoax would have you pay a price for gasoline that only the rich could afford.

Opposition to building the Keystone pipeline will only reduce addition oil supplies. This is lauded by the Peak Oil charlatans because they seek higher gas prices to compel the consumer to convert to their anti fossil fuel existence. Reduce energy costs by abolishing the Obama green energy tax. Lower gasoline prices foster dynamic economic growth. As long as the policy wonks are determined to bankrupt the public with high gas costs, you will experience a fallen standard of living.

James Hall

SARTRE

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2012 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife