The Gasoline Blues

[7/4]

Where was it 2.85 a year ago, I haven't seen under 3 since the 90's. I am not kidding.

It was under $3 here in NJ only a few weeks ago, especially in my neighborhood. We have NY Harbor and refineries to keep prices down.

I filled up my tank at $3.29 a gallon yesterday. It's still too much.

.

[Chuck Nessa]

$3.68 today.

[Chalupa]

[Joe G]

http://www.organissimo.org/forum/index.php...st&p=482337

[alocispepraluger102]

driving?

i drive 3 or 4 days a week.

bicycles and new balance running shoes give surprisingly good mileage.

[Chuck Nessa]

The falling dollar is driving the price up. Live with it.

[Jim Alfredson]

Show me how to get a Hammond organ and Leslie on the back of that bad boy, and I'm there.

[Free For All]

Show me how to get a Hammond organ and Leslie on the back of that bad boy, and I'm there.

[Robert J]

[BeBop]

Just landed in San Francisco, California and headed North for two days of work.

Chevron in Mendocino - $4.88.

Still, a whole lot less than I paid last week (obviously outside the US)

Cross reference to the How's the Weather Thread: 28 this morning in Napa Valley

[Chalupa]

April 21, 2008

Op-Ed Columnist

Running Out of Planet to Exploit

By PAUL KRUGMAN

Nine years ago The Economist ran a big story on oil, which was then selling for $10 a barrel. The magazine warned that this might not last. Instead, it suggested, oil might well fall to $5 a barrel.

In any case, The Economist asserted, the world faced “the prospect of cheap, plentiful oil for the foreseeable future.”

Last week, oil hit $117.

It’s not just oil that has defied the complacency of a few years back. Food prices have also soared, as have the prices of basic metals. And the global surge in commodity prices is reviving a question we haven’t heard much since the 1970s: Will limited supplies of natural resources pose an obstacle to future world economic growth?

How you answer this question depends largely on what you believe is driving the rise in resource prices. Broadly speaking, there are three competing views.

The first is that it’s mainly speculation — that investors, looking for high returns at a time of low interest rates, have piled into commodity futures, driving up prices. On this view, someday soon the bubble will burst and high resource prices will go the way of Pets.com.

The second view is that soaring resource prices do, in fact, have a basis in fundamentals — especially rapidly growing demand from newly meat-eating, car-driving Chinese — but that given time we’ll drill more wells, plant more acres, and increased supply will push prices right back down again.

The third view is that the era of cheap resources is over for good — that we’re running out of oil, running out of land to expand food production and generally running out of planet to exploit.

I find myself somewhere between the second and third views.

There are some very smart people — not least, George Soros — who believe that we’re in a commodities bubble (although Mr. Soros says that the bubble is still in its “growth phase”). My problem with this view, however, is this: Where are the inventories?

Normally, speculation drives up commodity prices by promoting hoarding. Yet there’s no sign of resource hoarding in the data: inventories of food and metals are at or near historic lows, while oil inventories are only normal.

The best argument for the second view, that the resource crunch is real but temporary, is the strong resemblance between what we’re seeing now and the resource crisis of the 1970s.

What Americans mostly remember about the 1970s are soaring oil prices and lines at gas stations. But there was also a severe global food crisis, which caused a lot of pain at the supermarket checkout line — I remember 1974 as the year of Hamburger Helper — and, much more important, helped cause devastating famines in poorer countries.

In retrospect, the commodity boom of 1972-75 was probably the result of rapid world economic growth that outpaced supplies, combined with the effects of bad weather and Middle Eastern conflict. Eventually, the bad luck came to an end, new land was placed under cultivation, new sources of oil were found in the Gulf of Mexico and the North Sea, and resources got cheap again.

But this time may be different: concerns about what happens when an ever-growing world economy pushes up against the limits of a finite planet ring truer now than they did in the 1970s.

For one thing, I don’t expect growth in China to slow sharply anytime soon. That’s a big contrast with what happened in the 1970s, when growth in Japan and Europe, the emerging economies of the time, downshifted — and thereby took a lot of pressure off the world’s resources.

Meanwhile, resources are getting harder to find. Big oil discoveries, in particular, have become few and far between, and in the last few years oil production from new sources has been barely enough to offset declining production from established sources.

And the bad weather hitting agricultural production this time is starting to look more fundamental and permanent than El Niño and La Niña, which disrupted crops 35 years ago. Australia, in particular, is now in the 10th year of a drought that looks more and more like a long-term manifestation of climate change.

Suppose that we really are running up against global limits. What does it mean?

Even if it turns out that we’re really at or near peak world oil production, that doesn’t mean that one day we’ll say, “Oh my God! We just ran out of oil!” and watch civilization collapse into “Mad Max” anarchy.

But rich countries will face steady pressure on their economies from rising resource prices, making it harder to raise their standard of living. And some poor countries will find themselves living dangerously close to the edge — or over it.

Don’t look now, but the good times may have just stopped rolling.

[WorldB3]

Show me how to get a Hammond organ and Leslie on the back of that bad boy, and I'm there.

Well sure but I don't think the rest of the band would like it.

[Guy Berger]

There are some very smart people — not least, George Soros — who believe that we're in a commodities bubble (although Mr. Soros says that the bubble is still in its "growth phase"). My problem with this view, however, is this: Where are the inventories?

Normally, speculation drives up commodity prices by promoting hoarding. Yet there's no sign of resource hoarding in the data: inventories of food and metals are at or near historic lows, while oil inventories are only normal.

Well, we know there has been hoarding of rice recently - so at least for that commodity, we are probably seeing a bubble.

Personally I am much more sanguine than Krugman at least in the long run, which pushes me closer to the 2nd scenario and further from the 3rd. Consumption and production patterns will adjust in response to higher prices, and improving technology will help as well.

That said the short run could be pretty painful as the world adjusts.

Guy

Edited April 26, 2008 by Guy

[Jim Alfredson]

$3.89 in Lansing today. It was $3.49 yesterday. 40 cents in one day. Hey, why not!?

[Jazzmoose]

That's unbelievable!

I guess our $3.69 isn't too bad after all...

[RDK]

Paid $3.99 today - a new high for me. But I know someone who paid $4.79 in Beverly Hills.

[BERIGAN]

Paid $3.99 today - a new high for me. But I know someone who paid $4.79 in Beverly Hills.

Screw them rich folks, make 'em pay even more!

[Soulstation1]

anyone run out of gas?

good thing the shit happened at work

$5 worth of gas doesn't even get me above the E line

[Jim Alfredson]

Paid $4.16 coming back from South Bend to Lansing on Sunday. SWEET!

[The Magnificent Goldberg]

Fuel duty convoy to jam the capital

Press Assoc. - 2 hours 24 minutes agoLorry drivers are to pour into London for what organisers hope will be the largest-ever fuel duty protest in the capital.

(Advertisement)

Hauliers are angry at soaring fuel prices which have resulted in the average cost of diesel passing far beyond the 120p-a-litre mark.

Led by lorry drivers from Kent, the protest is expected to attract hundreds of hauliers from all around the UK.

The convoy will make its way to central London, parking close to Marble Arch.

Transport for London said the A40 will be closed between White City and Edgware Road, west London, from 10am until 3pm so that demonstrators can park their lorries.

The westbound carriageway of the A40, going out of London, will remain open.

A delegation from the demonstrators will hand a letter to 10 Downing Street demanding the immediate introduction of an essential user rebate which would allow HGV operators to claim some of the fuel duty back.

Mike Presneill, a leading member of Transaction 2007, who is helping to organise the protest, said: "Fuel is rocketing. The Government has the power to act but appears not to be listening. Hundreds of UK transport firms are being driven to the wall. Thousands of UK jobs are being lost.

"Foreign hauliers are entering the UK with cheaper fuel purchased abroad. They contribute nothing to our economy."

Kent-based haulier Peter Knight said: "This is the economics of the mad house. If we are wiped out, the work will be done by foreign hauliers who pay nothing to the UK in tax."

http://uk.news.yahoo.com/pressass/20080526...al-6323e80.html

MG

[sidewinder]

Led by lorry drivers from Kent

Didn't the Peasants' Revolt start from there too?

I guess we can all look forward to another 'Winter of Discontent' this year..

[Tim McG]

$4.35 a gallon here.

This after an $18 Billion dollar quarterly profit recently reported by the oil companies.

Supply and demand my butt.

Edited May 26, 2008 by GoodSpeak

[makpjazz57]

I have a 2000 Maxima requiring premium gas. I just filled it from about 1/2 a tank at $4.12/gallon. I'm driving to NYC (from Boston area) next week; I better plan on at least $125 for fuel expense (not to mention the $40/day parking fee to keep my car in a parking garage)!

Marla

[Shawn]

When I went to work yesterday morning at 9:30am the gas station across the street was selling it at $3.64 a gallon. When I got off work at 7:30pm the same gas station was $3.75 a gallon. That's more than a 1 cent per hour increase....fucking insane.

[John Tapscott]

$5.77 per Imperial gallon (equivalent to $4.61 for a U.S. gallon) here in Canada. It's ridiculous, though Canada benefits in some ways from high oil prices. On the other hand, it kills our tourism industry - what American is their right mind is going to drive up here this summer? But as far as Krugman's article goes, I don't think he places enough emphasis on #1 - the speculators. I am more and more convinced they are driving this thing (and food prices, too). I am looking forward to the days these bastards (sorry!) get burned! It happened in the 80's and it will happen again.