U.S. gasoline, $4.11 in July, now averages $1.75, Lundberg Survey says

Joseph Lazzaro — Mon, 08 Dec 2008 13:51:00 EST

Filed under: International Markets, Forecasts, Commodities, Oil, Recession

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.

What is new about this cycle, Oil Shock III, is the speed of gasoline's price plunge: never have gasoline prices plummeted so much, so quickly, Dietz said.

"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."

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U.S. gasoline, $4.11 in July, now averages $1.75, Lundberg Survey says originally appeared on BloggingStocks on Mon, 08 Dec 2008 13:51:00 EST. Please see our terms for use of feeds.

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Gas prices jump another 10 cents to $4.10 average

Joseph Lazzaro — Mon, 23 Jun 2008 11:22:00 EST

Filed under: Commodities, Oil

The upward arc of gasoline prices in the United States continues.

The average U.S. price for a gallon of gasoline rose 10 cents in the past two weeks to $4.10, the Lundberg Survey announced, The Associated Press reported Monday.

Mid-grade gasoline averaged $4.22 per gallon; premium, $4.33. Tulsa, Oklahoma recorded the cheapest regular unleaded gasoline in the nation, at $3.76; the Los Angeles and Fresno areas of California, the highest, at $4.59 for regular unleaded.

Further, the average gasoline price is up $1.10 or 36% compared to a year ago. The Lundberg Survey collects price data from 5,000 gas stations nationally.

Further, gasoline's record price rise has renewed a policy debate between Republicans and Democrats in Washington concerning the most effective way to lower gasoline prices, Bloomberg News reported. Republicans favor lifting the ban on offshore drilling, while Democrats favor increasing vehicle fuel efficiency requirements.

Gasoline Analysis: Despite a considerable reduction in U.S. gasoline consumption, year-over-year, U.S. gasoline prices continue to march higher, due to higher oil costs and an inadequate U.S. refinery system. Further, assuming prices follow their historical, seasonal path -- upward through at least the July 4 holiday period -- in the U.S., the average gasoline price is likely to exceed the U.S. Energy Information Agency's estimate of $4.15 per gallon -- a level that will continue to reduce disposable income and lower GDP growth.

Gas prices jump another 10 cents to $4.10 average originally appeared on BloggingStocks on Mon, 23 Jun 2008 11:22:00 EST. Please see our terms for use of feeds.

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