Power Line: Obama’s Gas Pains
02/19/2012 4 Comments
Russ Steele
I have been tracking gas prices for over a year now, watching the ups and downs attempting to derive some meaning from the changes in direction, which at time appear to be random. That said, I would like to bring this Power Line analysis HERE to your attention. You can read the whole article, but this is a most interesting graphic:
I wrote about the rapid fall in gas consumption, and the economic connections HERE. Now it has come to the attentions of Steven Hayward at Power Line.
More anomalous is Obama’s explanation this week that “gas prices are on the rise again because as the economy strengthens, global demand for oil increases.” It is true that global demand for oil is probably the primary driver of the price of oil right now (though surely a risk premium because of Iran is in the mix somewhere), but here in the U.S. demand for gasoline seems to be way off, as shown in the figure below which I plotted earlier this week for my Energy Fact of the Week squib over on American.com. The figure shows retail gasoline deliveries—the best proxy for consumption—falling off a cliff starting a few months ago—before prices began to creep back up. The fall in consumption ought to be holding down gasoline prices, all other things being equal (which they never are). Is the economy about to fall over the cliff along with this indicator? That’s what a lot of people are wondering.
One reader suggested that every car owner in the nation is keeping a half a tank full just in case there is a crisis on the horizon. Another suggested that will million of people out of the work force they do not have any money to buy gas and are riding public transportation.
I am interested in your ideas. Why has gas consumptions fallen off the cliff since last October? Gas consumption has been a reliable economic indicator in the past, why not our current future?
About Russ
IMHO…. fuel prices are being artificially manipulated for various reasons. As Barack Hussein Obama entered the White House three years ago gas prices per gallon were $2.00 less than today. No better time to look like a hero in eight months when the pain at the pump is eased just before the ballot box is about to get stuffed. Yes, Iran’s nuclear saber rattling and screwing with the EU’s gas supply is helping push up prices but Obama’s shunning the Canadian pipeline offer is a direct assault on America’s economy from within.
To be honest, the data looks believable until the last two data points. Fuel consumption was stable through most of 2011 until Sept then you get very low numbers for Oct & Nov. I would be very suspicious of those last two points and perhaps that’s why there is no update to the data since then.
As far as the president’s popularity and gas prices, I think it will put pressure on him to do all that he can to hold the line on oil prices until the election. Wouldn’t be surprised to see another release from the strategic oil reserve.
I can tell you its not public transportation – it is very expensive – I occastionally ride the bus downtown to meet Susan. It is 1.75 each way now, after big increases and I can drive down there in 10 minutes on the I State – maybe 5-6 miles tops. Of course the bus takes at least 30 minutes not counting waiting for it. I will say you can get a longer ride than I take for that 1.75
The Great depression was the first Double Dip recession with both dips caused by two different government actions. Could we be seeing the first signs of the second Double Dip recession caused by the Obama actions of the last three years? To complicate matters, Iran cut off oil supplies to England and France today which will drive the oil markets wild when they open on monday. Expect another jump in oil over the next week and it will be reflected in our prices over the next few months.
If Obama wants to try and save us, he will have to resume all drilling and open the pipe line next week but I think he has already waited to long. So much for Obama talking to Iran. They have seen the weakness of his metal.