This year, gas cost to fix record highs, hurting the economy. Analysts disagree on whether a repeat is in the shop.
The rumblings you’ve heard at gas stations is not your imagination: It’s the sound of motorists looking at the pump prices are rising toward record highs for this time of year.
The average selling price of one liter gasoline Friday was $ 3,083 and $ 3,342 nationally in California, nationally significant $ 2.709 in California and $ 3,032 one year earlier, according to AAA’s daily survey of fuel prices. The Energy Department, the weekly gasoline price survey, released Monday, showed similar results.
Analysts attribute the increase largely to higher crude oil costs, which on Monday to $ 92.66 per barrel, jumped a 26-month high, before settling lower. Oil closed Friday at $ 88.03 a barrel in New York futures trading.
The last time gas prices started the year at the same level in 2008, they reached all-time highs in June and July. It has drivers that such a run could happen again.
“It’s just ridiculous. Every day is another big chunk of my income. I have all of $ 40 for a fill-up to $ 60 for a fill-in just the past few weeks,” said Eric Ott, a 47 – year-old Valley Glen resident who saw prices as high as $ 3.89 a gallon Friday behind the wheel of his 2007 Jeep Liberty.
Ott, a freelance troubleshooter who used information technology as much as $ 60 per hour command, it does not feel like the recession is over. With so many out-of-work IT professionals competing for jobs, Ott says he only earn about $ 35 per hour.
Jeep Ott thirst is not helping, but because it is worth less than what he owes on, he does not feel he can afford to get rid of. His health insurance premiums are rising considerably, Ott said, and shopping at Costco is no longer affordable. Now, he says, he does most of his messages at 99 cents stores.
“These gas prices are very near my breaking point,” said Ott.
Analysts disagree on whether drivers will be a repeat of the record from 2008 in California average of $ 4.588 per gallon, reached in June to see that, according to Energy Department records, and whether it would record national average of $ 4,114 per gallon, the approach achieved one month later.
“We were in for another real roller coaster,” said Jeff Spring, a spokesman for AAA of Southern California. AAA’s Daily Fuel Gauge Report showed record highs for the month of December prices last month.
“These are the kind of numbers that serve as a starting point for investors put more money into commodities, making the price of oil, which pushes the price of gasoline,” Spring said.
Patrick Haan, senior oil analyst for the 250 local price-posting websites GasBuddy.com, said that prices this summer could exceed the 2008 record.
“We’re pretty big drops in crude oil inventories show. Ask rising and OPEC is no evidence that it is interested in increasing supply,” says Haan.
But Tom Kloza, chief oil analyst for the Oil Information Service, said prices this year could be mitigated by factors not in play in 2008. Among them, Kloza said, a European debt crisis that the U.S. dollar might strengthen, and allows investors a refund of the commodities, including oil.
The biggest difference this time, the memory of what the 2008 prices have done to aggravate the recession will be, Kloza said.
“The memory of 2008 serves as a big red flag,” he said. “These prices can be a huge amount of demand destruction spawn” – in other words, the cost can lead people to drive less – which would help lower prices.
“It’s a big warning,” Kloza said, “we can not expect strong economic growth with oil at $ 120, $ 130, $ 140 per barrel and gasoline at $ 4 per gallon and higher.”.
source:latimes
European Coal losing to South Africa for renewable energy: Energy Markets
Germany's largest program of solar and wind energy production has European coal prices below South Africa for the first time in 10 months. . . Read more »
Canada Stocks Rise on Prospect of oil sands investment Sinopec
The Canadian stock market has gained for a third day as shares of energy rose on the prospect of China's oil & Chemical Corp. . . Read more »