How much did you pay for gas today?

I stay away from these threads for a reason.

But the rise in price of crude oil, along with the rises in prices of just about EVERY commodity is only partially a supply and demand story (and looking at U.S. stockpiles, ignores the global picture, btw).

Our Federal Reserve has been on a mission, particularly since 2008, when we began running up a lot of debt, to devalue that debt so we can keep running up more debt. That means policies that have devalued the dollar, including two rounds of quantitative easing, which included us selling bonds and the Federal Reserve being the biggest buyer of them (i.e. -- we are selling bonds to ourselves and the Fed's balance sheet is in the several trillion dollar range -- unprecedented and a situation that is only remedied by them running a printing press to create more currency -- which creates inflation). We have also had interest rates permanently near 0. That is inflationary, too.

The result of that is inflation, whether the juked measure they use for core CPI (they have manipulated CPI to try to hide it) captures it or not.

Oil (and just about everything else) is getting more expensive, because the dollar is becoming more and more worthless by the day. Oil is sold in dollars. To make up for our devaluation of the dollar, the price of oil has gone up from those lows it hit after the economic meltdown (which was an anamoly and an overreaction). As has the price of gold (the truest gauge of inflation -- and why I started that thread I sometimes revive, to point out what was happening). As have most agricultural commodities.

Oil in the immediate term is going to keep going up in price, as long as the U.S. (and just about every other central bank in the world, which is doing the same thing to one degree or another) keeps crapping all over their currencies, to create inflation, in order to try to devalue the debt they have racked up. In the longer term, oil is subject to several other factors that mean it is only going to get more and more expensive over time. First, geopolitically, most of the biggest oil producing countries are unstable. Secondly, known oil reserves are decreasing and several producers (notably the Saudis) lie about their capacity. The ONLY thing that has kept a barrel of crude oil from shooting through $200 a barrel by now is the global recession that has come, hovered and come again since 2008, which means that demand for oil has been down. When the economic mess around the world plays its way through, with that supply picture -- limited and becoming even more limited -- and several emerging markets that will be guzzling oil if their economies start growing again the way they were in the mid 2000s, oil is going to just get a lot more expensive.

Get used to it. It isn't a conspiracy. It is common sense. All of those factors -- devalued dollars right now. No new reserves. Any pick ups in demand. They all bode for higher oil prices over time. There is no other scenario.

 

Call me willfully ignorant. There is so much competition in the market for gas sales, that you will have to prove price manipulation to me. That implies they all get together and conspire to raise prices above what they are paying from the refineries and do it in sync. Could be happening, I suppose. People allege things like that. I have never seen any proof of it.

And in fact. ... Gas prices, actually track the price of WTI crude fairly closely, all things being equal. If the price of oil goes up. It filters through to the pump and you can see those price spikes when the oil markets have had dramatic weeks.

Other things can contribute, too, tough. If one refinery goes down, say due to a hurricane, it can effect the price. There are other forces at work. But to a large degree, so goes the price of oil, so goes the price of gas at the pump.

By the way, I pay a lot of attention to oil markets. I have traded in them. I know people on here have it in their heads that oil traders have a vested interest in the price of oil going up. They don't. I have made more money when oil prices were plummeting (last time around) than I did when the price was rising.