CNBC: Next stop $6 a gallon …. $7 not far away

If gas prices were on a train right now it would definitely be riding the President’s high speed rail. Steve posted on this in March when gas was around $3. The we told you a week ago that gas prices (then $3.90) were headed in this direction and got no interest from callers.  Something tells me gas will soon be center stage. CNBC thinks so … so do others. Obama video below the fold.

CNBC’s report is getting plenty of play, and well it should. While Trump has been grabbing the headlines inside the beltway … oil has been grabbing your bucks, and CNBC explains how the dollar is the root cause and Obama the accomplice,

Weakness in the US currency feeds upward pressure on commodities, which are priced in dollars and thus come at a discount on the foreign markets.

One result has been a surge higher in gasoline prices to nearly $4 a gallon before the summer driving season even starts, a trend that economists say will be aggravated as demand increases and the summer storm season threatens to disrupt oil supplies.

CNBC goes on to explain just how much the weak dollar has added to gas prices:

Using a model that combines “subtle rates of change” with movements in the dollar index [.DXY  74.35  -0.02  (-0.03%) ] and commodity prices, Hastings figures the low dollar is responsible for about one-third, or $1.31, of the total gas-at-the-pump cost. Regular unleaded Wednesday was $3.84 a gallon nationwide, according to AAA.

And then this:

Hastings sees gasoline having “no problem” getting to $6.50 a gallon over the summer after increased demand and storm disruptions come into play.Others, though, say gasoline prices haven’t needed any help so far from other events—the moves by the Fed to keep interest rates in negative real terms are enough to boost energy by themselves.

Not shocked enough. Steve documented the run-up just this year, last month.

It took 24 days, from Feb. 1 to Feb. 24, for the national average for unleaded gasoline to climb from $3.101 to 3.228. The last comparable period of “eye-popping” gas prices: the 20 days between Feb. 21 and March 11, 2008, when the national average climbed from $3.086 to $3.227.

The President today blamed speculators. People hedging the price contribute, no question. They can see the handwriting on the wall and moving quickly to cover. Why? Because there is no sign that either the President will change his attitude on drilling (see SOS post here) or the Fed’s, and the President’s policy of cheap money. The result is $4 a gallon.

Meanwhile the President remains committed to his crazy windmill, solar, energy of the future program even in the face of this budget busting gas price explosion. Here he is today in his Facebook appearance once again pushing alternatives that might someday help  you, your kids, your grand kids.


But if you can’t wait for his windmill car … you can take the advice he gave last week to a father of 10 … just get one of his Government Motors cars, or better yet, use birth control or next time get an abortion … also lefty solutions.


I could go on and on here. High prices don’t bother the”high speed, urban dwelling, limousine left liberal elite”. Once more, just for old time sake. The year is 2008 and Obama is just getting started. Ahh to be a multimillionaire liberal TV anchor.


Oh and one more note to you lefties. Drilling now will indeed take 4 to 10 years to produce, but just the commitment alone will squeeze the speculators out of the market. the rest is up to the President.

UPDATE: The headline has been changed to reflect CNBC as the source for the $6 a gallon story. The original headline had CNBC at the very end of the headline which I thought confusing. My bad.

23 replies
  1. gillie28
    gillie28 says:

    This is an issue that is close to my pocket-book, as I often have to exchange dollars for euros.? Apart from the fact that the deficit is out of control, Bernanke?(Fed chairman) is against a strong dollar and has been?openly supporting the euro against it.? I’m pretty sure the Treasury is also complicit in this since it allows multi-national corporations to make more money (ie. GM).?
    This is a disaster for those in the US who have to pay for unsubsidized gas (as opposed to Washington politicos who get an allowance) and those of us who have to live overseas for?whatever the reason.
    For?one supporting?reference, please read the following:
    Federal Reserve Chairman Ben Bernanke?s speech in Frankfurt may be one of the most important and underreported events since America abandoned the gold standard. In it, he said the dollar standard was flawed and that America?s trade deficit was imperiling America.
    ?[I]t would be desirable for the global community, over time, to devise [a new] international monetary system,? he said.”?

    Not a “conspiracy theorist, but these words speak?volumes as to Bernankes attitude toward the US, and by extension, towards global internationalism, etc. etc.? and the diminishing of US influence.? I know the US isn’t perfect by any means, but if we aren’t the “global” superpower, just think of the?alternatives.

  2. Shared Sacrifice
    Shared Sacrifice says:

    My theory is the government wants higher gas prices because that means more tax revenue not only on the fuel but everything else that rises with it! And this boondoggle is presided over by the party that just crucified Bush, Cheney and greedy big oil!???????????????? Could our export of money for oil? be similar to the bankrupting of China during the opium wars as the US and British smuggled pot into China while smuggling out the gold and silver?? Surely Obama feels like he’s spreading the wealth around as he tells Brazil that he’d like for us to be their biggest oil customer…? Why pay Brazil good money for something we could get in our own backyard?

  3. RoBrDona
    RoBrDona says:

    The easy fix is domestic drilling. Unfortunately it?is just tilting at windmills while?The?O is in office.

  4. David R
    David R says:

    The price of oil is influenced by the value of the dollar, OPEC, the oil companies and speculation, all of which respond to wars and uncertainty.? When oil prices rise here they also rise everywhere oil is imported.? More drilling here is against the 60 year old strategic dictum “use their’s first”? and will not impact prices in the short term. Long term, price will be determined by increased demand in China, India and other modernizing countries. Rising oil prices now, slows the growth of those economies and may have a greater economic impact?on those nations?because they are less efficient in the use of energy than the US. (They need use a lot more energy to make a buck than we do.) China is building smaller cars and will be the world leader in production of fuel efficient and alternative fuel vehicles. Regardless of what happens with oil prices we need to work our butts off to develop efficient energy consuming products and practices. ?What we are experiencing now is the fourth wake-up call since the 70s. Don’t blame anyone for the current mess. Insist that government and corporations finally respond. Anybody who says there’s an easy solution is kidding you.

    • Dimsdale
      Dimsdale says:

      Actually, the prices rise everywhere, whether imported or not.? No, there are no easy solutions, but there are solutions.?? Since the Chinese are likely to steal our tech anyway, why not sell it to them and make a buck, and ensure that they don’t have to reinvent the wheel, efficiency wise?? I think some responsibility could be shouldered by the governments of the world by quelling the mess in the Middle East.? But politics are in play there too.
      As I mentioned previously, if we backed off our pursuit of the unobtainable 100% efficient energy source, and say, invested in automotive Diesels without being hobbled by energy consuming pollution devices, we could cut our use of automotive fuels almost in half.?

  5. winnie888
    winnie888 says:

    I’m going to take a simplistic view of this whole price of gasoline debacle:? We have a president, he’s supposed to be leading this country to some form of prosperity.? So far, all he has done is increase the cost of (my) living and the cost of living for everyone I know.? The price of gas in CT went over $4/gallon nearly three Saturdays ago. Where was the mainstream media then?? Suddenly Obama is going to start investigating why prices are so high and continue to increase at an alarming rate?? Honestly, why doesn’t matter to me:? what matters to me and my neighbors is that our ‘leader’ step up to the plate, announce that he’s going to allow U.S. companies to drill again and with any luck get these prices under control.
    As Republican Rep. Ted Poe from TX said recently:? “It’s about time we start laying pipe.”? (no lie…that’s what he said)

  6. Don Lombardo
    Don Lombardo says:

    How many more times is Obama going to tell the LIE that the U.S. has 0nly 2% of the world’s resources and uses 25%?? A true Manchurian Candidate.

  7. Dimsdale
    Dimsdale says:

    High fuel prices should be the antithesis of the Democrat argument because it affects the poor and middle class the most, the groups for whom they pretend to be heroes.? High fuel prices barely cause a hiccup in the lifestyles of the dreaded “rich” (but maybe not those $200K/year “millionaires”!).
    Building refineries will protect us from price spikes, drilling for domestic energy will influence world prices, and investing in alternative energies that are not ready for prime time will all be to the good.? The clock on the old liberal statement that “if we start drilling today, the oil won’t be available for 10 year” starts NOW.? It should have started in the 70’s, 80’s and 90’s.? All that oil shale in the Bakken formation should be exploited.
    Since the 70’s, our cars have been cleaned up well over 90%, fuel efficiency has increased, and engineering has made cars more long lasting.?? But to get over the hump of the last few percentage points of clean or efficient that the greenies so crave will cost more than the previous 90+%.??? Stupid things like regional/seasonal reformulations of fuel are costing us untold billions and achieving little.? That is a net loss.
    Instead of allowing a president to use AF1 to go give a speech on our dime, then do a fundraiser in the same place, we should say that if you are doing a fundraiser on gov’t time, your campaign should pay for it.

  8. djt
    djt says:

    I don’t mean to rain on anyone’s parade here, but gas trends this way every year, and its usually due (or at least blamed) on the weak dollar and speculators. Gas spikes in the spring, tops out in july and slowly falls back again. I don’t know the real reasons, but the trends are made obvious here, at least for the past 6 years:

    • JollyRoger
      JollyRoger says:

      Don’t piss on my shoes and tell me it’s raining!? $4 gas is a problem- unless you live with your parents, walk to work, and get Joe Kennedy and Hugo Chavez fill your oil tank!

  9. sammy22
    sammy22 says:

    David R put forth a reasoned argument for the rise of gas prices (though little was said about the costs of going from a barrel of oil out of the ground to a gallon of refined oil into gasoline). The response to his statements has been the usual pointing of fingers and as usual in the wrong direction: it’s always somebody’s else fault.

    • David R
      David R says:

      Thanks Sammy;? There are times when we need to get beyond partisan bickering. I’d like to see Dems and Reps get on the case of their respective leaders to recognise common purpose and find common ground. Last time we had record gas prices we had a Republican president, and I’d bet McCain lost votes as a result.? Now the shoe is on the other foot and Republicans will try to use?high gas prices?to their advantage. I’d bet they’ll succeed too, and we still won’t have a coherent energy policy.? Politics as usual?is to blame for that.

  10. sammy22
    sammy22 says:

    Just read an article in the New Yorker about the oil boom in North Dakota: more oil reserves than Kuwait and? Iraq combined. Wells are being drilled at a frenetic pace and they are producing. That boom does not seem to have “affected” the price of oil on the world market. Have not heard about the Williston Basin from the “drill, baby drill” crowd, just moaning and groaning about the Gulf of Mexico.

    • Dimsdale
      Dimsdale says:

      Well, one difference is that the Williston Basin (Bakken oil shale reserves) is creating jobs (with the help of the higher oil prices), while the Gulf of Mexico is losing jobs, thanks to the deliberate, somnambulistic permitting by the feds, hence the “moaning and groaning”.? If anything, the higher oil prices should be driving even more drilling in the Gulf.
      And then there are the refineries…..

  11. sammy22
    sammy22 says:

    The drilling in the Gulf, i.e. deep sea drilling may be affected, but there are lots of shallow drilling opportunities. As for the refineries, they are victims of NIMBY ( just like the LNG terminal that was scuttled in the L.I. Sound).

    • Dimsdale
      Dimsdale says:

      Exactly, although under this administration, the word “opportunity” might be a bit optomistic.
      Maybe they could put refineries where the nukes? are!

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