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Price of Gas Nears Record High, Food Pain and Stock Market Too

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31 comments on Price of Gas Nears Record High, Food Pain and Stock Market Too

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National Gas Price image courtesy of AAA

According to the AAA, the record average gas price for regular unleaded gas was $4.114 on 7/17/2008. Diesel hit a record on the same date at $4.845.  

Price History

Price per gallon data from AAA, chart by Mish, price rounded to two decimals

LA Gas Price

https://twitter.com/Tony_Sagami/status/1500712893624782850

Wheat Hits New Record High

Wheat futures courtesy of Barchart.Com annotations by Mish

Wheat futures were halted limit up at the open today and closed at a new record high.

Nearly all commodities are spiking higher.

Canadian Crude

Nickel Spikes 82 Percent

Fertilizer

https://twitter.com/YETICapital99/status/1500822834280599552

Stock Earnings

Alleged “Benefits of Running the Economy Hot”

Charles Evans, president and chief executive officer of the Chicago Fed wants to run the economy hot.

For discussion, please see Chicago Fed President Praises the “Benefits of Running the Economy Hot”

Hello Charles Evans, Care to Reconsider?

Real Personal Income Declines for the 8th Time in 9 Months

Real incomes are sinking but spending isn’t. …. Yet

For discussion, please see Real Personal Income Declines for the 8th Time in 9 Months

R E C E S S I O N

Pain Levels

S&P 500 courtesy of StockCharts.Com, annotations by Mish

The stock market is not close to factoring in these global disruptions

A recession is baked in the cake. Stock market declines even if there miraculously is no recession.

S&P 500 – What is the Pain Threshold for the Fed and Traders?

How low will the bear market to go?

This post originated on MishTalk.Com.

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31 Comments
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Oldest Most Voted
honestcreditguy
honestcreditguy
4 years ago
375 SPY coming…but for bulls the fear index is 12 so very close to big short covering rally
a super spike in NG is coming $10-12 not out of question. 
Start accumulating AI here…..I work in big industry and AI is only going to get bigger…..Siebel is a smart cookie to boot…..
gold  – Oil ratio says /CL could go to $200 to get back to mean avg
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Eddie_T
Eddie_T
4 years ago
My pivot into more small cap Canadian O&G’s  and uranium equities is paying off pretty well. Dow down nearly 800 (2.37%) today , I was up 7.38% on the day.
We ARE in very dangerous waters for many reasons. Potential credit market lock-ups, possible waterfall drops in broad US stock indices, more government meddling in energy markets, all are distinct possibilities. So far the most interesting thing to me about the stock market correction is the orderliness of it. A 2% Dow drop doesn’t hurt prices for oil or oil equites. But I would expect to see a sudden 10% drop change the complexion of things considerably.
My view is that the soft landing in US equities so far  has been helped by behind the scenes manips by the PPT. I don’t watch the trading in real time most days, but people who do, say the signs are there.
Canadian O&G stocks are still seriously undervalued though, at today’s prices, based on fundamentals. Eric Nuttall, the maven of Canadian oil, said yesterday  the upside for the AVERAGE Canadian oil company is over 100% from current prices.  The uranium carry trade, which has been big, seems to be close to being unwound, and Sprott is buying lots of physical uranium out of the spot market most days, and this helps support uranium equities.
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Eddie_T
orderly declines are the worst, they bring in dip buyers and keep retail guessing on if bottom is near….
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Carl_R
Carl_R
4 years ago
Reply to  Eddie_T
Canadian Oil companies would be worth more, and gas prices would be lower, if they had completed the Keystone Pipeline.
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Eddie_T
Eddie_T
4 years ago
Reply to  Carl_R
Without a doubt.
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prumbly
prumbly
4 years ago
Reply to  Eddie_T
Biggest risk for Canadian oil companies would be the climate change fruitcakes – who knows what lunacy they will come with next.
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Christoball
Christoball
4 years ago
Reply to  Eddie_T
Wonder if we will see buyouts and ensuing consolidation of oil companies, and then pumping like crazy to pay for it?
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Mish
Mish
4 years ago
Technically, there is support at the 3600 level and even more at the 3200 level.
I expect a decent bounce at at least one of those places.
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thimk
thimk
4 years ago
deja vue? .  wasn’t the last GFC and subsequent stock market crash  preceded  by high oil prices ? Any correlation ?  never seen gas prices  rise almost hourly . 
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Captain Ahab
Captain Ahab
4 years ago
Reply to  thimk
2008 was the tail end of a post 9-11 global ‘boom,’ with China subsizing the price of fuel for its citizens. Demand increased. Prices increased. Then, the recession… If you understood this, you got out of oil stocks near the peak.
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thimk
thimk
4 years ago
Reply to  Captain Ahab
good stuff Captain , It is remarkable that the stock  market  post 2020 went on an unprecedented ride during a global pandemic/shutdown.  Conventional thinking would hinge this effect on lowering interest rates and stimulus . Any comment ?   
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Captain Ahab
2008 was not a 9-11 boom…..it was a housing market bubble bursting across the globe with AAA paper now D paper, chain reactions were tied to SIV and CDOS…..oil was just one of many commodity derivative bets……
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Billy
Billy
4 years ago
I sure wish we had a pipeline from our neighbors who care about our environment far more than the country bombing nuclear plants in Ukraine.
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Cocoa
Cocoa
4 years ago
Reply to  Billy
Also, we are still shipping it on trains which derail near cities and towns. So environmental wackos are getting nothing out of this
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Cocoa
democrats talk clean energy and green but they enjoy commodity gap ups more than even the republicans…..
republicans and democrats, same poop, 2 different piles……although one is hell bent on flooding America with illegal leeches…
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prumbly
prumbly
4 years ago
Reply to  Billy
The “Russia attacks nuclear power plant!”,”10 times worse than Chrnobyl!” was rather obvious propaganda, don’t you think?
Turns out it was a small fire in a minor administrative building. No one knows who started that fire…
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MPO45
MPO45
4 years ago
Mish, the graph states “Headed Here” and it looks like 2600.   When do you think this will happen?   If you can call it correctly, there is a ton of money to be made buying puts on SPY.    The end of March $285 strikes right now are selling for a mere $0.39 so if we drop from 4200 to 2800 then that’s a potential profit of $135 per contract.  With $3900 investment can turn into $1.35 million.   I’m asking for a friend…
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Mish
Mish
4 years ago
Reply to  MPO45
I do not have a timeline
It could be 6 months or 2 years – some would suggest never, but 2800 is my minimum down target. The line I drew today was at 2600.
I rather doubt 2 months but it’s possible
Current month – very little chance – simply too far out
I used to think it would take years – I am leaning towards sooner as there is a perfect storm, but not 1-2 months.
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Captain Ahab
Captain Ahab
4 years ago
Reply to  MPO45
This is one way of taking advantage, but with risk out the wazoo, and it is not what the graph means anyway. 23 days from now, 2600 is possible, not likely.  By the end of 2022, it is more likely.
Also, 2009 to 2022 is not the relevant period for mean reversion. It is an artificial condition induced by the Fed,  For example, go back to 2000 or so and draw the line of best fit–that is another scenario for mean reversion (long term trend). Or calculate the growth rate of the SP from an ‘average’ over say 40 years and ask yourself why should it be any different from the last 10 years…
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JJ Johnson
JJ Johnson
4 years ago
Damn, North Dakota looking like it’ll be a financial power house for a little bit again.
Oil in the Bakken.  Farmers can transition to spring wheat fast and fertilizer production can ramp up again.  
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Doug78
Doug78
4 years ago
Reply to  JJ Johnson
And the same for Alberta to the north.
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Too much BS
Too much BS
4 years ago

The Biden effect,  Markets crash , push for war and got WAR. and looming Recession.

The Trump effect, profits and markets went up, Up and UP ,  World at Peace. 

Lets get back to peace , tranquility and making money.  BRING BACK TRUMP  and FIRE Biden.

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Cocoa
Cocoa
4 years ago
Reply to  Too much BS
Trump, for his hot air, didn’t try to antagonize a major nuclear power into a zero sum game. Only Neo Liberal/Con American Exceptionalists think this is a great idea. Only room for one broke super power for them!
Europe was just fine buying Nat Gas and resources from Russia. We really think stealing Russian commerce and bankrupting it is making anyones’ life better? Now we are all paying more, for less with Ukraine suffering the most for no reason at all. Are we really going to ship CNG on boats to EU???
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Siliconguy
Siliconguy
4 years ago
Reply to  Cocoa
There are not enough liquified natural gas carriers to fully replace Russian gas. There is certainly money to be made in the short term though. It takes two or three years to build a LNG tanker, and longer than that to build the liquification plant, so there is no short term fix. And there will be no new construction unless it is very obvious that the “excess profits” will stick around long enough to pay for the construction cost.
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Carl_R
Carl_R
4 years ago
Reply to  Cocoa
CNG and LNG are very different. LNG it liquid because it is cold and slightly pressurized, while CNG is liquid because it room temperature, and highly pressurized, to 4400 psi. CNG requires very heavy, thick tanks, and CNG is not shipped anywhere, and especially not on boats.
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yooj
yooj
4 years ago
Reply to  Too much BS
The kin of tens of thousands of dead Afghans would take issue that peace on Earth prevailed during the Trump administration. Biden brought peace to Afghanistan, albeit in a tragically poorly executed manner (and acknowledging that there is no freedom in Afghanistan now).  Domestically, Trump traded in division,  which fostered violence and  culminated in the fatal combat in and around the Capitol. Contrary to advancing world peace,  Trump declared trade war on China, and torpedoed the Iranian agreement on nukes.  Far from a peaceful time,  Trump’s willingness to abide, if not to court, violence as a means to gain and hold power made a second civil war in the U.S. conceivable.  For the sake of peace, keep Trump and those of his might makes right ideology out of office.  
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Jmurr
Jmurr
4 years ago
Reply to  yooj
I do recall the price of gas being around $2 when he left. What Biden has done will impoverish many Americans. 
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honestcreditguy
honestcreditguy
4 years ago
Reply to  yooj
Trump was protecting America, So you want Iran to have nukes, when they support every terrorist cell in the world? China tariffs were a long time coming and it took a business man to do it….Biden is a reckless, demented soul, listless and the pale white horse….get ready because your inept demented potus is going to bring more pain than most can comprehend
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Too much BS
Trump was not elected because the PTB and military complex knew he was pulling US out of NATO in 2nd term…..its that simple…..
this is all about NATO aggression….a cold war military complex organization that has no reason to exist accept to sell more arms to baltic states….
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Cocoa
Cocoa
4 years ago
Joe Biden’s America, and this guy has the gall to tell us that difficult times lie ahead for all of us. IF WE DIDN’T INSIST ON GOADING UKRAINE INTO WANTING TO JOIN NATO, we could all live in a nice interdependent economy. Instead, these US Exceptionalist dingwings really want us to knock the Russians off the podium-which only makes the regular guy suffer even more. I am willing to bet this is all staged for crisis capitalists to grab more and for the FED to print more free money for their friends to buy more hard assets and real estate.
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