Gasoline prices have risen for five straight weeks. Last week, they jumped 12.2 cents per gallon, pushing the average price up 17.4 cents higher than a year ago, according to USA Today. The days of cheap gasoline are gone forever.
Economically, gas may still be relatively inexpensive. Indeed, people in Europe have been paying through the nose for years. But that matters little to U.S. consumers, particularly amid uncertainties about the economy.
It doesn't take much of a change in prices for them to react. Everyone isn't going to buy hybrids tomorrow but people are going to change their behavior. Maybe they won't fill up their SUVs every time. Maybe they will take public transportation more often. Maybe they'll carpool. Maybe they'll care more about global warming.
Even Exxon Mobil Corp. (NYSE:XOM) can't control the laws of supply and demand. Supplies are tight and demand is high and it's going to get even higher. Of course, as everybody who ever took Economics 101 knows, when that happens prices go up.
Oil prices are going to remain strong thanks to the tensions between the U.S. and Iran, which don't look like they are going to ease anytime soon.
Remember, we aren't even in the summer driving season yet. Lord knows what's going to happen then when vacationers hit the open road.
When my five-month-old son gets older, he'll never believe that gasoline was ever under $1 per gallon let alone $2. Many people are going to have a tough time accepting the new reality for some time to come.
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Reader Comments (Page 1 of 1)
3-06-2007 @ 10:58AM
Howard Lee Harkness said...
In addition to replacing my old pickup with a smaller and more fuel-efficient one, I'm planning to move closer to work -- and telecommute at least 2 days per week. In about 5-6 years, I'll be ready for an aftermarket EV conversion for my pickup, by which time 10,000-cycle rapid-charge LiON batteries should be readily available, and photovoltaic arrays should be approaching 35% or better efficiency. I'll also be doing most of my work at my (PV-powered) home.
Many non-manufacturing jobs can be done by telecommuting, and the fuel savings are fabulous.
3-07-2007 @ 10:33AM
Voris said...
It would be interesting to see a nurse telecommunting to work, or your server in you favortie dining place. The only people who can telecommute to work are those who do nothing except push information around.
3-06-2007 @ 11:12AM
jonathan berr said...
Voris,
As a telecommuter, my feelings are only hurt slightly.
You do make a good point though.
Jonathan Berr
3-06-2007 @ 1:59PM
Howard Lee Harkness said...
"The only people who can telecommute to work are those who do nothing except push information around." --Voris
Mostly true, but there are exceptions. For instance, I sell violins -- and I sell almost all of them by mailorder (actually, I use UPS, which has a much better record of getting them to the buyer un-damaged). So, in a sense, I 'telecommute' all over the US, and I deliver more than just information-pushing.
In my day job, I'm a programmer, which means that I just "push information around", as Voris aptly puts it. There are LOTS of people who do that, and many of us could and should telecommute. Roughly speaking, almost anybody who spends his day in a cubicle farm probably should telecommute. There are some other issues with telecommuting, but I don't think that they are insurmountable.
Any energy I don't use driving to work means more left to go around.
As for nurses, burger-flippers (quite a spectrum there), and other personal-service providers, I would agree that the technology to telecommute isn't there yet (and may never be, but I wouldn't rule it out completely).
But come to think of it, I'll bet burger-flippers will have other problems with telecommuting anyway. About the only time I engage the services of a burger-flipper (or pizza-thrower, or any other foodservice worker) is when I have alread driven to work... When I'm at home, I prepare my own food (which is like giving myself a hefty tax-free raise). I suspect that widespread telecommuting will put a major hurt on the restaurant business, with grocery stores reaping the benefit.
3-06-2007 @ 2:46PM
Aaron said...
I feel it helps to hedge my gas spending by buying stock in oil companies when gas prices start to really hurt.
During the last run up in gas prices I owned chevron. With the money I made I offset a lot of my gas spending for the year, and I drive a lot! Two oil stocks I’ve been watching right now are Valero (VLO) and Diamond Offshore (DO).
Aaron
www.marketflavor.com
3-07-2007 @ 7:17AM
Charlie said...
How sadly humorous this whole 'article' (and national issue) is.
Jonathan... You begin your 'story' with an opening paragraph which includes the wording "...according to USA Today." Then, in your fourth paragraph you write: "Even Exxon Mobil Corp. (NYSE:XOM) can't control the laws of supply and demand. Supplies are tight and demand is high and it's going to get even higher. Of course, as everybody who ever took Economics 101 knows, when that happens prices go up."
Supplies are tight??? ...and demand is high?
Hmmm... someone missed the USA Today news article that I am now reading on 'AOL Money & Finance' titled "Gas Prices Rise; More Pain Seen Ahead".
In THIS article I read the following:
(The good news for consumers is gasoline supplies are plentiful and price spikes are not likely.
"Right now, I don't see any reason for consumers to think we're going to revisit $3 a gallon gasoline this spring," Sundstrom said.)
Gasoline supplies are plentiful ???
OK... same ol' lines the American public hears day in, day out, year after miserable year.
All double-speak... all weightless 'justifications'.
And "increased demand" ? Where was that and when ? It sure wasn't during the past 4 weeks in the Midwest ! We've been snowbound and if anything have been 'demanding' less than in any other given February.
So, we continue to be the helpless pawns in big government's/big oil's game of chess.
I wish there truly was some humor in all of this. I have yet to find it.