Rising Gas Prices

[guido911]

I wonder if the rising gas prices are gradual enough as candidate Obama had preferred.

Has he and other democrat leaders spoken out about these increasing gas prices? Because when these prices were rising when Bush was president, we heard very frequently from dems about how terrible it was and how it was all Bush's fault.

[HazMatCFO]

QE1 and QE2; working as intended.

[nathanm]

QE1 and QE2; working as intended.

No, nothing to do with supply constraints from Libya driving up the price of oil. 

[Ed W]

No, nothing to do with supply constraints from Libya driving up the price of oil. 

As I understand it, Libya supplies about 2% of the world's oil production.  Reduced output shouldn't have much effect on world oil prices. 

[Hoss]

As I understand it, Libya supplies about 2% of the world's oil production.  Reduced output shouldn't have much effect on world oil prices. 

Speculators.  It has nothing to do with output math.  The speculators should all be strung up.

[dbacks fan]

As I understand it, Libya supplies about 2% of the world's oil production.  Reduced output shouldn't have much effect on world oil prices. 

I read this on CNBC the other day about the top 15 oil producers in the world and Libya is not even in the top 15.

http://www.cnbc.com/id/41887743?slide=1

[RecycleMichael]

The speculators should all be strung up.

+1000

[guido911]

+1000

Was it the speculators fault a few years ago (when Bush was president) when gas prices spiked?  As I recall, Pelosi blamed Bush and not the speculators:

See also: http://articles.cnn.com/2008-07-17/politics/congress.oil_1_drilling-anwr-pelosi?_s=PM:POLITICS

And there is also this from Hillary and Reid:

Just in time for the summer driving season comes a rise in the price of gasoline, along with the predictable effort by the Democrats to make political hay of the issue. Senator Clinton issued a statement Monday asserting that "Today's record-high gas prices are the price that the American people are paying for the Bush Administration's failed energy policies."

Said Mrs. Clinton, "We need to move forward with a real energy plan that will reduce our dependence on foreign oil by speeding development of biofuels and more efficient vehicles. I have proposed a $50 billion Strategic Energy Fund to invest in these and other clean energy technologies. It's time for an Apollo project for energy to move us away from foreign oil and towards clean energy alternatives that will reduce prices for consumers, protect our environment and increase our energy independence."

The Senate majority leader, Harold Reid, chimed in with a similar statement, saying, "The news that our nation's gas prices have hit an all-time high – especially as we approach the beginning of the summer travel season – underscores the urgent need for a better national energy policy that quickly brings clean and affordable renewable fuels and more energy-efficient vehicles to market. We have to make it a national priority to reduce our reliance on oil, especially foreign oil."

And, as if there were some kind of coordinated talking points on the topic, the chairman of the House Democratic Caucus, Rep. Rahm Emanuel, also sent out a press release about the price of gas. "For six years, Republicans did nothing to make our nation energy independent while handing out taxpayer funded giveaways to big oil. Now the American people are paying the price," Mr. Emanuel said. "This week, Democrats will consider legislation to help prevent gas price gouging and in the coming weeks, we will continue to develop the strategies we need to secure our energy future and protect our environment."

http://www.nysun.com/editorials/gas-and-the-democrats/55074/
So can we now blame Obama for higher gas prices?

[Hoss]

Was it the speculators fault a few years ago (when Bush was president) when gas prices spiked?  As I recall, Pelosi blamed Bush and not the speculators:

So can we now blame Obama for higher gas prices?

Look!

[HazMatCFO]

No, nothing to do with supply constraints from Libya driving up the price of oil. 

Prices were going up before Libyan crisis and will continue to do so.

[Red Arrow]

Prices were going up before Libyan crisis and will continue to do so.

They went up in anticipation of the Libyan crisis.   

[HazMatCFO]

Prices up 20% before the Libyan crisis as compared to October 2010.  libyan crisis just accelerated the increase.   

[we vs us]

Prices up 20% before the Libyan crisis as compared to October 2010.  libyan crisis just accelerated the increase.   

I actually find myself agreeing with you to a degree:  which is to say that, thanks to the Fed, there's now yet another vast pool of money floating around out there, and it's chasing any good returns.  And just like the housing bubble, the chase tends to bid up the prices of the asset beyond real value.  I read a nice little report in Time this week, but have also been tracking it via The Oil Drum, which has some very smart commentators. 

[cynical]

As Red Arrow points out, the increases began earlier because markets respond to unrest in the Middle East by hoarding products that the Middle East supplies.  Beginning with Tunisia, there was plenty of talk about the protests spreading, as they did.  When Mubarak came under fire, the markets considered it a major event destabilizing the entire region, as it has.  When the supply of a raw material becomes questionable, inventories of that raw material are hoarded and the value of those inventories increases. Like it or not, in a deregulated market the owners of those inventories get to sell them at market prices. Call it speculation if you wish, but stringing up someone because they're selling at market rates is a bit inconsistent with American belief in free enterprise, isn't it?

Libya is a component of the issue.  It is probably more significant than the 2% figure mentioned below.  Libya is a major supplier to Europe. As suppliers shift to fill the space left by Libya's departure, costs go up and availability goes down for a time.  That part will stabilize, but not right away.

Prices up 20% before the Libyan crisis as compared to October 2010.  libyan crisis just accelerated the increase.   

[Red Arrow]

Like it or not, in a deregulated market the owners of those inventories get to sell them at market prices. Call it speculation if you wish, but stringing up someone because they're selling at market rates is a bit inconsistent with American belief in free enterprise, isn't it?

Unfortunately, we have allowed ourselves to be in the position of not having much choice about buying petroleum products.  The other side of the free market is having the ability to not buy a product you believe is over priced.  

I still prefer the deregulated product.  I remember gas lines in the early 70s.  Gas was still relatively inexpensive but it was only available at 8 gallons at a time at most gas stations in the Va Beach, VA area.  It was rationing by the retailers.  Fortunately, I was a regular at a particular station and the owner allowed his regular customers to fill up most of the time.

Edit: Think 12 mpg and 20 to 25 gallon gas tanks as being common.