$7 gasoline is highly likely

[DarthTrader]

At the current inflation of Producer Prices in oil and gas - we aren't even close to 2008 prices yet. Thus if we see the price of oil and gas production increase to historic levels we can expect $7 gasoline.

I don't see those prices coming down, since ironically the price of oil is a big positive feedback loop in the production of oil, and also, steel is in short supply, big steel crunch going on.

Producer Price Index by Industry: Oil and Gas Extraction

Graph and download economic data for Producer Price Index by Industry: Oil and Gas Extraction (PCU21112111) from Dec 1985 to Apr 2024 about extraction, oil, gas, PPI, industry, inflation, price index, indexes, price, and USA.

fred.stlouisfed.org

 

[Canon Shooter]

When I was a kid my Dad drove for Exxon. At the end of every shift, after emptying his 8,000 tanker into various stations around Long Island, he'd go back to the plant and empty the residual gas into gas cans. It was usually about 30 gallons or so per shift, so he didn't do it every shift, but we didn't actually buy gasoline for years...

 

[marvin martian]

At the current inflation of Producer Prices in oil and gas - we aren't even close to 2008 prices yet. Thus if we see the price of oil and gas production increase to historic levels we can expect $7 gasoline.

I don't see those prices coming down, since ironically the price of oil is a big positive feedback loop in the production of oil, and also, steel is in short supply, big steel crunch going on.

Producer Price Index by Industry: Oil and Gas Extraction

Graph and download economic data for Producer Price Index by Industry: Oil and Gas Extraction (PCU21112111) from Dec 1985 to Apr 2024 about extraction, oil, gas, PPI, industry, inflation, price index, indexes, price, and USA.

fred.stlouisfed.org

Joe Biden promised to "end fossil fuels". This is part of the plan.

 

[kyzr]

The Fed is going to raise interest rates aggressively, which means a nasty recession is going to happen.
The price of everything is going up, the stock market is going down, and there is a vicious war in Ukraine.
The Xidens are under investigation.

No wonder the polls show the Republicans doing well in November, lets hope Xiden doesn't start a nuclear war by then.

 

[DarthTrader]

When I was a kid my Dad drove for Exxon. At the end of every shift, after emptying his 8,000 tanker into various stations around Long Island, he'd go back to the plant and empty the residual gas into gas cans. It was usually about 30 gallons or so per shift, so he didn't do it every shift, but we didn't actually buy gasoline for years...

Back then that was a nice tip, now it's like a minimum wage lol.

 

[Canon Shooter]

Back then that was a nice tip, now it's like a minimum wage lol.

The local big-wigs at Exxon didn't care, as that gasoline would've just been cleared from the tanks anyway.

I can remember gas at .33¢ a gallon; early to mid-70's...

 

[DarthTrader]

The Fed is going to raise interest rates aggressively, which means a nasty recession is going to happen.
The price of everything is going up, the stock market is going down, and there is a vicious war in Ukraine.
The Xidens are under investigation.

No wonder the polls show the Republicans doing well in November, lets hope Xiden doesn't start a nuclear war by then.

Not that straight forward, I agree a recession is coming but the FEDs are probably too stupid to understand why (and that's the truth).

But - if you want to know the MAGNITUDE of the US recession just look at how many 25bp hikes we get since the FIRST yield curve inversion.

The biggest "tightening" was 1929, what would have been a normal global recession was turned into a crisis by bubble-paranoid FEDs tightening the hell out of the largest consumer economy.

But the next biggest was 2008, the FEDs tightened 17 times. 3 of them were after the 10-2 yield curve inversion.

It's those last 3 that really demolished the economy in 2007-2009 that then lingered demolished for years.

One 50bp hike will get us a pretty severe recession, if they make it to 75bp then well...I'd argue 2008 all over again.

 

[LA RAM FAN]

Your late to the party,it already is in califirnia

 

[Jessica-stormlover]

lets pray to god that Biden doesn't screw up bad enough to launch gas to these levels. A lot of poor people will suffer greatly. Of course, that will mean the democrats will be slaughtered in the midterm and election in 2024.

 

[marvin martian]

A lot of poor people will suffer greatly.

That's the goal of virtually all DemoKKKrat policy.

 

[DarthTrader]

lets pray to god that Biden doesn't screw up bad enough to launch gas to these levels. A lot of poor people will suffer greatly. Of course, that will mean the democrats will be slaughtered in the midterm and election in 2024.

It's pretty much baked in the cake. PPI is notoriously sticky, because it is caused by entrenched inflation or supply problems elsewhere. Steel costs more because fuel is up, fuel is up because steel costs more. Very basic example of the problem.

 

[DarthTrader]

Your late to the party,it already is in califirnia

California is the Spain or Greece of the US.....I really don't care what their prices are, they are in a hyperinflation death spiral.

See in a UNIFIED CURRENCY the currency can't inflate but the prices still do. So you get this huge over-priced region where that economy on a unified currency is suffering inflation.

California's standard of living has gone into the shitter over 20 years. It's little more now than a colony of the metropole (Washington D.C. / New York)

 

[rightwinger]

Prices are dropping from their $4.25 highs

The world is adjusting to Putin’s Folly and gas prices will stabilize

 

[Ghost1776]

At the current inflation of Producer Prices in oil and gas - we aren't even close to 2008 prices yet. Thus if we see the price of oil and gas production increase to historic levels we can expect $7 gasoline.

I don't see those prices coming down, since ironically the price of oil is a big positive feedback loop in the production of oil, and also, steel is in short supply, big steel crunch going on.

Producer Price Index by Industry: Oil and Gas Extraction

Graph and download economic data for Producer Price Index by Industry: Oil and Gas Extraction (PCU21112111) from Dec 1985 to Apr 2024 about extraction, oil, gas, PPI, industry, inflation, price index, indexes, price, and USA.

fred.stlouisfed.org

Try 10 bucks and that’s not CA. Lol

 

[Ghost1776]

7 will the LOW

USA and Local National Gas Station Price Heat Map - GasBuddy.com

Check out the heat map for average unleaded gas prices around the country for both Canada and the US. Type in your city to see a local gas prices map.

www.gasbuddy.com

PRICES ARE GOING LOWER LMFAO!!!
You’d have to be on another planet to fall for that one.

 

[Resnic]

The Fed is going to raise interest rates aggressively, which means a nasty recession is going to happen.
The price of everything is going up, the stock market is going down, and there is a vicious war in Ukraine.
The Xidens are under investigation.

No wonder the polls show the Republicans doing well in November, lets hope Xiden doesn't start a nuclear war by then.

You also have things like how the yield curve has reversed which is a bad sign.

Meaning a lot of bank institutions before say you buy a bond or some other investment the amount of interest they gave you on a 10 year bond was much higher than a 2 year bond because they wanted your money long term and wanted to give you incentives to let them have it for longer periods of time.

Now a lot it's reversed, 2 year interest is actually higher than a 10 year. That is not a good sign.

 

[kyzr]

Not that straight forward, I agree a recession is coming but the FEDs are probably too stupid to understand why (and that's the truth).

But - if you want to know the MAGNITUDE of the US recession just look at how many 25bp hikes we get since the FIRST yield curve inversion.

The biggest "tightening" was 1929, what would have been a normal global recession was turned into a crisis by bubble-paranoid FEDs tightening the hell out of the largest consumer economy.

But the next biggest was 2008, the FEDs tightened 17 times. 3 of them were after the 10-2 yield curve inversion.

It's those last 3 that really demolished the economy in 2007-2009 that then lingered demolished for years.

One 50bp hike will get us a pretty severe recession, if they make it to 75bp then well...I'd argue 2008 all over again.

1. LOL!! The Fed thinks they are smart...they are in-fact driving the bus with interest rates....but I agree that most economists and bankers are clueless why unexpected things happen.

2. There are inversions and there are inversions, the latest ticky-tack inversion shouldn't count. We'll see how smart or stupid this Fed is by how deep the recession is. I'm hoping for a quick/deep one and then stability when the Republicans get in and get the "war on energy" over.

3. I remember when Paul Volker raised interest rates to 20% to kill 10% inflation. It worked, but man that was nasty business.

Paul Volcker and How He Got a Shock and a Rule Named After Him

Paul Volcker, Federal Reserve Chair from 1979-1987, raised fed funds rate to a record 20% to end inflation. How he got a shock and a rule named after him.

www.thebalance.com

4. IMHO we'll get a 50 bp raise in May and then another in June, which only takes the rates to about 1.5%, which is very low by historic norms. I'm not seeing that reducing inflation. Then the Fed projects 6 more 0.25 bp hikes, so that the interest rate at the end of 2022 is only about 3%, still very low. So I'm thinking that inflation will be worse than the recession.

New Federal Reserve projections show six more rate hikes this year

The Federal Reserve released its updated dot plot and latest projections for economic growth and inflation on Wednesday.

www.cnbc.com

5. Will cheaper gas in 2023-2024 curb inflation more than the 3% interest rates? We'll see.