If you said UP, you're 100% right!
Is it Bush?
Is it the Democratic Congress?
Nope, it's neither, as it turns out, this coming Thursday (March 1st) marks the switch-over to the more expensive "summer blend." Gasoline prices in the metro area are expected to soar to near $3/gallon well before sumer!
Hey! HEY!! It's not all gloom and doom. In fact, it's long been a boon to Wall Street. As Paul Tharp of the NY Post writes, "Gasoline's rite of spring also gives Wall Street traders their most dependable and predictable profit rally of the year, often in the double digits, analysts say."
A week before the switch, this past Thursday, February 22nd, unleaded regular futures shot up a bold 2.9%
Peter Beutel of Cameron Hanover said, "Basically it's "Hear we go again,' " adding that many traders have used this strategy based on the summer switch - buy contracts on March 1st and sell half by May 1st and the other half by May 15th. Beutel claims, "It's consistently yielded profits for 19 of the last 22 years."
Last year that strategy produced a 39% trading profit on gasoline and over the past twenty years, it's paid an average of $77,107 per contract.
Still, the bad news, for consumers, is that gasoline prices are expected to rise from their 2/22/07 lows of $2.48/gallon (NY) & $2.13/gallon (NJ) by around 45 cents/gallon by EARLY spring!
Hey It's spring! Time to bend over and open up your wallets!!!
This is gonna hurt a little bit.
Last fall, before the elections, a Democrat whom I have known for years and whose opinions I have always respected even when in disagreement, startled me with this pronouncement:
ReplyDelete"Just watch, Malcolm, when this election is over, the price of gas is going to go through the roof!"
I immediately caught the unsaid implication that Bush was (yet again) in cahoots with the Saudis to suppress oil prices before an election and attempted to rebut her with details as to how oil prices are determined.
She would have none of it.
I sighed and realized that yet another Democrat had drunk the Kool-Aid of collusion. Even one of the best and brightest I have known.
Of course, she was wrong. I tried to elicit a reaction from her via an email to her husband regarding another matter but Dave has not been married for 28 years for nothing. He didn't take the bait.
JMK, have you heard anything lately about congressional hearings regarding Big Oil?
Naw, neither have I. Because the price, while now creeping upward, is not the abominable $3.37 that I paid last summer. It shows the utter lack of sincerity among our whores, er, elected representatives in DC.
It's amazing to me that the view you speak of is not at all uncommon, Mal.
ReplyDeleteI guess it shouldn't be so surprising, because I've heard so many otherwise reasonable people either blame or praise the sitting President for "the economy," despite the fact that (1) it's the legislative branch that really most impacts the economy via tax policy and regulation, etc. and (2) often, little was done by government to bring about the changes they liked or didn't.
In fact, from what I've seen government rarely does anything (save cutting taxes) that boosts the economy.
I too heard many, many people talk about the surging price of oil, sure to come after the 2004 election.
China's & India's increasing demand meant nothing to them, the many supply disruptions were discounted, our own inadequate refining capacity was discounted too!
No, it had to be "manipulation by Bush," because the BDS crowd wouldn't believe anything else.
And you're 100% right about those hearings.
I recall Senators Clinton & Schumer, among others, calling for a "Windfall Profits Tax!"
Yeah, let's hand that money over to government, they'll know what to do with it!!!