The fact that gasoline prices have risen, then fallen, is nothing new, so says energy trader Jim Dietz.Gasoline prices have risen and fallen - - or exhibited cyclicality, in traderspeak - - for decades.
Consider:
- 1973-74 Arab oil embargo: Oil Shock I - - U.S. gasoline prices double from about 35 cents per gallon to about 60 cents per gallon. (Or from $1.50 to $2.50 per gallon in today's dollars.) U.S. recession ensues. Over the next six years prices decline to about $1.80 in today's dollars.
- 1979-80 Iranian Revolution: Oil Shock II - - U.S. gasoline prices double from about 70 cents per gallon to $1.45. (Or from about $2.00 to $3.50 in today's dollars. U.S. recession ensues. Over the next 10 years prices decline to about $1.60 in today's dollars.
"After rising to what had been historically high levels of about $2.50 per gallon in 2006, prices rocketed up to ridiculous levels above $4 per gallon this summer in what we now know was a speculative bubble, a lot of it fed by leverage-amplified hedge and investment funds," Dietz said. "They distorted the market, no question."
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
