Average Gas Price Just a Penny Shy of $5.00 a Gallon

Scooot

3 years ago

It was a bit annoying to read the UK is exporting billions of fuel to the US, whilst we’re having to pay the equivalent of about $8.35 per Gallon. All because of our fuel duties of course.

https://www.bloomberg.com/news/articles/2022-06-09/uk-sends-billions-of-liters-of-petrol-to-us-where-it-s-cheaper

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PapaDave

3 years ago

Reply to Scooot

Its a fair trade. The US is exporting LNG to the UK and the EU.

Asia is also shipping lots of gasoline to the US.

Gasoline prices would be $10/gal already in the US if it wasn’t for the imports from Asia, the UK and the EU. The US no longer has enough refining capacity to meet its own needs. Prices will have to rise until demand for gasoline drops more.

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Scooot

3 years ago

Reply to PapaDave

Yeah, I suppose so.

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PapaDave

3 years ago

Reply to Scooot

When there is a shortage of oil, grain, petrol, water, etc, nations and good neighbors often stop sharing. At least we are still sharing and helping each other out. Hopefully it won’t get so bad that we all stop sharing. But I don’t know.

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Jojo

3 years ago

I’d almost kill for $5/gal gas now.

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MPO45

3 years ago

Average price of gas 2022 (https://ycharts.com/indicators/us_gas_price)

Jan – $3.40

Feb – $3.58

Mar – $4.41

Apr – $4.20

May – $4.37

Jun – $4.97

According to extrapolation by Excel. if nothing changes then we can expect gas to be:

Jun -$4.90

Jul -$5.109

Aug -$5.385

Sep -$5.661

Oct -$5.937

Nov -$6.213

Dec -$6.489

Plan and hedge accordingly. Since food production and distribution is dependent on energy, expect the same for your food bill. (Hint Hint: Investment opportunity).

Politicians aren’t going to save you people. You have been warned.

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shamrock

3 years ago

Reply to MPO45

It doesn’t work that way. If it was that easy everyone would be rich.

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shamrock

3 years ago

Reply to MPO45

What that looks like is the energy component of CPI for June could easily surpass 10% month over month. And that would imply at least 1.5% month over month, a shocking number.

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Jojo

3 years ago

Reply to MPO45

CA leads the nation as always. $7-$8/gal is getting common where I live.

Our state has a huge surplus, almost $100 BILLION! Governor Newsom, up for reelection in November, wants to send every car owner $400 to help with gas prices, even if they own an electric car. [lol]

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PapaDave

3 years ago

Reply to Jojo

Government policy will continue to support demand while at the same time restricting supply. I love it. That keeps the cash flow rolling in for oil companies that I own.

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Anon1970

3 years ago

Reply to PapaDave

Was June 10 a great dividend day for you?

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PapaDave

3 years ago

Reply to Anon1970

Not particularly. June 15 looks pretty good.

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William Janes

3 years ago

Reply to MPO45

You are far behind the moment. Oil has a classic boom and bust cycle. Look at the charts for the last fifty years. Predictions have to precede events, not the other way around.

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Mish

3 years ago

Second Tweet on Forward Guidance Tool.

Forward guidance causes feedback loops

https://twitter.com/MishGEA/status/1535384940694495232?s=20&t=jCWxDo5WFLWWE6Du4rZxzA

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Maximus_Minimus

3 years ago

Reply to Mish

Forward guidance is yet another scammy tool invented after the GFC to secure their sorry derrieres. They want the guide speculators in their bets. No looking into data, no risk assessment, just plan as we say and you’ll be good.

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RonJ

3 years ago

“If the Fed has the tools to fight inflation, why hasn’t it use them already?”

The OFFICIAL NARRATIVE was that inflation was transitory. Anything else was misinformation. Don’t fight the OFFICIAL NARRATIVE.

Safe and effective.

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Aaron

3 years ago

I think many are missing a HUGE component, perhaps the largest component/underlying cause for our current level of inflation. If
California were a sovereign nation (2021), it would rank as the world’s
fifth largest economy, ahead of India and behind Germany. Take a look at the minimum wage history of California for the last 9 years https://fred.stlouisfed.org/series/STTMINWGCA – note that as of a few years ago it is actually $1 per hour higher for companies with 25+ employees – CA went from $8 to $15 for most companies, as did many other states.

2013-01-01 8.00

2014-01-01 9.00

2015-01-01 9.00

2016-01-01 10.00

2017-01-01 10.50

2018-01-01 11.00

2019-01-01 12.00

2020-01-01 12.00

2021-01-01 13.00

2022-01-01 14.00

State minimum wage exploded higher, and many predicted when the wage hikes were announced that it would lead to inflation. I do not think those 1 time stimulus checks had much of an effect compared to the permanent, huge wage increases. There are 2080 full time work hours in a year. A fast food employee increasing his hourly by $7 is making $14560 more per year, every year, than he or she was a few short years ago! That is where most of the non-transitory inflation is coming from.

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Jojo

3 years ago

Reply to Aaron

Agreed. But it wasn’t just the lower wage workers getting raises. Most everyone that were making more money than the minimum wagers also got raises and are making even more. I posted a story a few threads back about a Netflix Sr. Software Engineer quitting a $450k yearly job because he was “bored”. Google/FB/etc pay people just out of college north of $200k. This leads to:

Jojo’s economic relativity axiom ©

If someone gives every American an extra $1000/month, then undoubtedly and in the aggregate, the cost of the average person’s monthly bills will also rise by $1000/month, thus leaving everyone in the same relative economic position when all is said and done. You’ll make more money but you won’t have any more to spend.

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Felix_Mish

3 years ago

Reply to Jojo

And, of course, your tax bracket goes up as you make “more”.

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bowwow

3 years ago

Reply to Aaron

Agreed. It would be difficult to estimate well. Nonetheless, I would like to know $ increased wages or salaries that were raised, either directly or indirectly, due to minimum wage increase mandates over the last few years.

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FromBrussels

3 years ago

Wtf are you americans complaining about ? Since your criminal warmonging rogue regime armtwisted (blackmailed?, bribed ?) our utterly worthless EU idiots into cutting off reliable, cheap russian energy we now pay 11$ /Gallon !….my natural gas bill more than tripled from150 to almost 500 euro/month ! Things WILL only get worse if we can t manage to get out of this US CREATED MESS! I may be wrong , and maybe it s only wishful thinking of mine , I get the impression though that some politicians , the clever ones that is, are beginning to realize what s really going and will hopefully break with America’s desperate hegemonic policy…..I hope .

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Jack

3 years ago

Reply to FromBrussels

Maybe it is a good time to move to Russia.

I hear energy and potato prices have decreased there.

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FromBrussels

3 years ago

Reply to Jack

Changed your Avatar again? ‘Potato idiot’ …. good idea for the next one ….

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Zardoz

3 years ago

Reply to FromBrussels

All amercanski know how Russian love potato!

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FromBrussels

3 years ago

Reply to Zardoz

YOU, and your ‘liking’ yourselves avatars, in particular…..

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PapaDave

3 years ago

Reply to FromBrussels

I’m not complaining. I’m killing it in the markets thanks to Putin! You better move back to Russia if your nose is out of joint. I hear that their economy is doing great. From your posts! The land of milk and honey. Go home comrade. Putin misses you.

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FromBrussels

3 years ago

Reply to PapaDave

‘Market Killers’ have nothing tangible unless they manage to SELL at the right time …..Btw, I don t believe self promoting tiresome fn braggers ….with hindsight I know you can t even trust them….

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PapaDave

3 years ago

Reply to FromBrussels

Lol. I have bought and sold so many times in the last 2 years in my trading position that I have tripled my wealth. And I couldn’t care less if you believe me.

Just so you know, I have never believed anything you say comrade. I rarely read your posts past the first expletive; which you overuse; which makes them very ineffective. You are a very sad and angry person.

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FromBrussels

3 years ago

Reply to PapaDave

suit yourself bragger, I am not interested in your ‘wealth’ either ….and 10K X 3 = 30K ?

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PapaDave

3 years ago

Reply to FromBrussels

What? No f shot? That’s better. Keep it up if you want me to read more of your comments. Though I won’t guarantee that I will.

And don’t expect me to stop bragging about how great this blog is and how it has made me wealthy in only two years. Gotta promote Mish.

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FromBrussels

3 years ago

Reply to PapaDave

Your private jet must be fn great….invite me over one day, we might become fn friends….oh fk not fn of course ….

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Zardoz

3 years ago

Reply to FromBrussels

Don’t be bitter, comrade Yoda. Enjoy Belgian potato while you should be defending mother russia from the terrible Ukrainians!

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Maximus_Minimus

3 years ago

Reply to FromBrussels

11$/gallon? Are you low-balling it?

Keep posting prices, which is useful info, and you can add prices in liters, not everybody is il-liter-ate.

Cut the rest. You don’t need to convert those who know the facts, and you cannot convert the imperial guard.

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FromBrussels

3 years ago

Reply to Maximus_Minimus

in Belgium,the Netherlands, Germany, +- 2,15 euro/ liter for diesel and normal gasoline, we also have Superpower gasoline at 2,50/ liter, some countries are 5, 10% or even 15% cheaper …. I thought a gallon is 4,5 liter, but that s the british one, the liquid american one is 3,80 liter so it will rather be 9 $/ gallon, and ticking ….

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Zardoz

3 years ago

Reply to FromBrussels

Come home and fight for mother russia, comrade! As you state, she is in great peril from Ukrainian potato stealers!

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shamrock

3 years ago

Me and my buddies were laughing a year ago because Powell (and others) would say inflation is transitory, but if it isn’t that they had “the tools” to deal with it. No journalist ever asked the obvious “what tools?” question, like what Powell says is gospel and not to be questioned.

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Mish

3 years ago

Reply to shamrock

The #1tool of the Fed is communication. The Fed believes this. And it was the subject of a nice Tweet thread yesterday.

I am pretty prolific on Twitter if you wish to follow @MishGEA

https://twitter.com/MishGEA/status/1535384511147520000?s=20&t=jCWxDo5WFLWWE6Du4rZxzA

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Lisa_Hooker

3 years ago

“If the Fed has the tools to fight inflation, why hasn’t it use them already?”

For the same reason that the Fed failed to create 2% target inflation for years and years.

The Fed doesn’t know how inflation actually works.

The Fed doesn’t even know how an economy works.

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Doug78

3 years ago

Why it’s hard to predict.

https://www.thefarside.com/2022/06/07/3

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MPO45

3 years ago

Reply to Doug78

Good one, “everyone has a plan until they get punched in the face.”

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PapaDave

3 years ago

I guess it’s normal human behaviour to try to find someone or something to blame when things don’t go the way we want. You can see that by reading the comments on this blog. So many seem to be caught up in the “blame game”: blame Putin, Biden, Trump, Democrats, Republicans, the Fed, the Saudis, and on and on. Which doesn’t mean much, since in most cases, there is no “one” thing to blame. The way that events roll, such as the current price of gasoline, is often dependent on hundreds of factors playing out over many years or even decades.

Fortunately, there are a few present and past commenters who understand how things work and can cut through the simple blame game analysis and focus in on what is actually going on.

Thank goodness I started following this blog a few years ago. Thank you Mish! I was fortunate at that time to read the analysis of several commenters who laid out the entire oil and energy scenario for all to see.

In a nutshell, it went like this: For dozens of reasons (which were clearly explained), oil companies had stopped investing in future exploration and development and refineries, which meant that future supply of oil, gas, and gasoline were going to be restricted for the rest of this decade, and probably next decade.

At the same time, all major governments, investors, and lenders were slowly abandoning the oil industry (for many clearly explained reasons), resulting in their share values trading at up to 80% discount to normal.

This resulted in a generational opportunity to buy deeply discounted companies in an industry that was looking at a long future of restricted supply. Even though oil was trading below $50 at that time (after briefly going negative), the case was made (as best I can remember) that oil would go to $80 by the end of 2021, and $90 in 2022, and higher each year after that.

It was as clear an analysis as I have ever seen and it was spot on. What it couldn’t foresee was the Russian invasion of Ukraine and response of western nations to that invasion. Which has served to accelerate the supply shortage which was coming anyway.

I took advantage of that excellent analysis to start accumulating the oil companies that were being recommended here. And I couldn’t be happier. Every time I fill up, I won’t complain about the high price of gas because it has made me oodles of profits in an even shorter time frame than I expected.

The only thing that still confuses me is that most of the commenters here seem to have completely missed out on the opportunity that was so clearly presented here for so many months. I guess they were too busy playing the blame game instead.

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Lisa_Hooker

3 years ago

Reply to PapaDave

TL:DR

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PapaDave

3 years ago

Reply to Lisa_Hooker

DGAS

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Lisa_Hooker

3 years ago

Reply to PapaDave

SSDD

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PapaDave

3 years ago

Reply to Lisa_Hooker

I am a simple man. Its what I know. Better than me rambling on about things I have no clue about. There is enough of that here already. I don’t need to add to it.

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Lisa_Hooker

3 years ago

Reply to PapaDave

But I always read your stuff. Almost always. More concise rambling would be quite nice. Just as often, just not as long.

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PapaDave

3 years ago

Reply to Lisa_Hooker

Good to know. I will try to be more succinct in the future. Though if it is too brief, it can be difficult to get the point across. I am trying to find the right balance.

That is why I left out the many reasons behind the scenarios that were presented by others over the last two years, and only focused on the conclusions.

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Zardoz

3 years ago

Reply to PapaDave

You are trying to reach political cultists. Any explanation that doesn’t break down to “us good, them bad” will be drowned out by “muh feelings”

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RonJ

3 years ago

Reply to Zardoz

Cult slogan: safe and effective.

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PapaDave

3 years ago

Reply to Zardoz

Not trying to “reach” anyone. I’m here for the great advice. Don’t give a FF about the idiots and their politics or their hurt feelings.

But as I say, it takes all kinds to make a market. The winners AND the losers. I prefer being a winner. I don’t care if they are all losers.

Keep up the good work Mish!

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MPO45

3 years ago

Reply to PapaDave

Excellent right up. An the next BIG thing that will happen will be the 60 million boomers that all hit 65+ in 2030. They will be collecting social security, enrolling in medicare/medicaid and demanding goods and services from the remaining less than 100 million workers.

There are promises of robots, self-driving cars, and tech automation that will fix all of this but I am very doubtful because none of those things have fixed the problems we have now or the past 40 years so why would the next 10 years be any different? Heck, most companies can’t find enough tech workers right now so what happens when 60 million leave the workforce?

I would offer some great investment advice but we have too many people here that would rather hear or talk about their democrat woke cult or their republican Taliban cult, both are lose-lose propositions guaranteed to make them poorer in the long run and quite frankly they deserve to reap what they sow.

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PapaDave

3 years ago

Reply to MPO45

I think you are on to one of the “next big thing” scenarios. Grantham and Dalio brought it up as well. The question is how to make money from it. It’s a bit more complex than a commodity like oil or gas.

As I say, I’m here for the great advice. Please don’t leave or get banned before we flesh this scenario out.

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MPO45

3 years ago

Reply to PapaDave

The best thing for you to do PapaDave is hang around boomers and find out what they like, what they want, and what they need.

I’ve given a clue about this in the past, boomers are and will be addicted to pharmaceuticals. A prudent investor would look up where/how/who/when Medicare and Medicaid are spending money NOW and extrapolate what that growth might be over the next 10 to 20 years. This information is public knowledge and there are agencies that track it just like the Fed for economics. If only you could see the giant spreadsheets that I have that track all of this to make me money.

Do the same for other boomer categories (Likes/Wants/Needs).

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PapaDave

3 years ago

Reply to MPO45

Nice. I look forward to this continuing conversation. Thanks in advance.

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killben

3 years ago

“If the Fed has the tools to fight inflation, why hasn’t it use them already?”

This is easy.We have a “Timid” Fed that constantly seeks wall street’s permission to hike or do QT. Also, if they did use the tools, the financial system may collapse.

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Jojo

3 years ago

Reply to killben

Volker saw the danger of inflation and raised short-term interest rates to 20%. Unemployment rose (by the old measure) to over 11%.

Powell doesn’t have the cojones to do that.

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Tony Bennett

3 years ago

When covid hit – and travel limited – there were record sales for RVs (< 15 mpg) and boats (Gallons to the Mile) by people looking to escape.

Hhmm, how are they faring?

When do they go on “sale”? … along with second home / vacation properties?

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Lisa_Hooker

3 years ago

Reply to Tony Bennett

The there’s the RVs that get 6-8 MPG.

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TexasTim65

3 years ago

Reply to Tony Bennett

They are more likely to just be ‘parked’ someplace since it costs too much to drive them.

I was driving yesterday and I passed a place just outside of the city (on a 1-2 acre lot) that had a sign up that said if you needed a room to rent for a good price, that there was an RV (presumably parked on his property and hooked up to water/power/electric) available.

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Jojo

3 years ago

Reply to Tony Bennett

Many weren’t looking to escape. They couldn’t pay their bills w/o work and lost their living arrangements. If they were lucky to have the financial wherewithal to afford an RV, then that was a better choice for them than a tent.

Most likely those RV’s and boats are parked, going nowhere now. CA is overrun with people living in RV’s these days.

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PreCambrian

3 years ago

Just as the attempts to tar Biden with the blame for all inflation don’t make much real sense, neither does Biden’s attempts to deflect blame. The original (pre-Ukraine invasion) inflation was caused by fiscal stimulus, two out of three of the stimulus packages were by Trump. The post-Ukraine inflation in food and energy can certainly be blamed on the Biden sanction response but the sanctions might be necessary. I have heard Mish’s reasoning against sanctions but I would like to hear some good reasoning for the sanctions (which might take other issues that Mish didn’t consider into account). Unfortunately these days it is hard to get any thoughtful discourse and everything turns into political theatre.

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Tony Bennett

3 years ago

Reply to PreCambrian

“The post-Ukraine inflation in food and energy can certainly be blamed on the Biden sanction response but the sanctions might be necessary.”

…

I give POTUS a pass here. Frankly, sanctions a joke. Removing vodka from liquor stores? Banning caviar from some river? Please. Strength of Ruble attests to failure.

Anyway, if you look at February CPI (Russia did not invade till near end of month).

Food year over year … +7.9%

Energy year over year … +25.6%

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TexasTim65

3 years ago

Reply to PreCambrian

It’s true it’s not all his fault. But what most people are angry about is that he claims out of the left side of his mouth to be wanting to do something about inflation while out of the right side he espouses policies that make things worse.

In other words you can’t claim you are going to help with high gas prices and then shut down pipelines (Keystone), ban drilling/fracking, send our natural gas to Europe (instead of here) and so on. At the same time increase lumber tariffs while lumber prices are at all time highs and so on.

Either your fighting inflation or your not. The same with green policies, either your committed to them or your not. He’s doing half measures on everything in an effort to make everyone happy but all he is doing is making no one happy. That’s why his polling numbers are brutal. He needs to commit to something (inflation/green/build back better) and make it the hill he’s going to die on politically since he has no chance to be re-elected anyway. At least then he’d be taking a stand.

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Zardoz

3 years ago

Reply to TexasTim65

I honestly don’t think he can hold a thought for more than 30 minutes. Every time he speaks he looks like he just finished a tense rehearsal of the speech. These government codgers need to go. Feinstein is basically a vegetable at this point.

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TexasTim65

3 years ago

Reply to Zardoz

I could not agree more. We are electing people who are so old they pre-date boomers!

There needs to be a clause put in that you can’t run for president/congress/senate after you turn 72. If you are under 72 you can run (and be done your term at 76).

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Felix_Mish

3 years ago

Reply to TexasTim65

The “clause” idea bears consideration! You can’t run for prez under 35. That rule has made and continues to make sense.

Back when the constitution was written, the supply of over-the-hillers was very, very limited. In the US, maybe only one guy: Franklin. So an oversight in the constitution is no surprise. But now people live much longer and have physical and mental aids to allow survival without serious robustness.

I’d go with 70. 70 lets in the good-judgment 60’s. Loses some from the best of the young 70’s, but makes younger people who have not aged well stand out enough to be hammered down.

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Jojo

3 years ago

Reply to PreCambrian

Short of NATO+USA going toe-to-toe with Russia and kicking them back to their borders (with the risk of a nuclear engagement, of course), sanctions, seizing assets and constraining financial instruments are the only non-violent ways to try and force Russia to reconsider its invasion.

If Russia were allowed to permanently take Ukraine (or any part of it), then what would the West do WHEN Putin decides to move against Moldova, Latvia, Estonia or Finland next? After all, he continues to get away with his agressions. It’s better to support Ukraine fighting as a proxy for the West now.

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TexasTim65

3 years ago

Reply to Jojo

Better for who? The military industrial complex?

It’s not better for me personally nor for my kids.

If we *really* fear those countries are next, just ship them all a couple dozen short range nuclear weapons. Problem solved as Russia won’t risk being nuked and invade them and we don’t have to spend any money.

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Jojo

3 years ago

Reply to TexasTim65

Sure. Guess we are lucky you aren’t in charge of anything. I feel sad for your kids though. You sound as clueless as Trump.

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Jojo

3 years ago

Reply to TexasTim65

The best China strategy? Defeat Russia

By Fareed Zakaria

June 9, 2022 at 6:47 p.m. EDT

https://www.washingtonpost.com/opinions/2022/06/09/biden-administration-defeat-russia-contain-china-ukraine-war/

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Lisa_Hooker

3 years ago

Reply to Jojo

Yup! We must support Ukraine until the very last Ukrainian is dead.

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Average Gas Price Just a Penny Shy of $5.00 a Gallon

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