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View Diary: Daily Kos Elections Morning Digest: Wisconsin Democrats file one million signatures to launch recall (131 comments)

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  •  Oil Prices Are At A Record Level For January..... (2+ / 0-)
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    Setsuna Mudo, MichaelNY just the average annual spring surge would rocket us well above $4 a gallon.  The Iranian saber rattling has been excuse enough thus far so the situation will have to cool over 2012 for prices not to soar, regardless of the paltry reduction in oil demand that occurs when prices spike.  

    Such a scenario is possible but we're in a deeply concerning and highly vulnerable situation right now....and it's foolish to think we as consumers can stop $5 a gallon gas anymore effectively than we stopped $3.50 a gallon gas, which would have been unthinkable 10 years ago.

    •  They tend to peak by Memorial Day (3+ / 0-)
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      Setsuna Mudo, Odysseus, MichaelNY

      for whatever reason, and then go down.  So, the impact would be dissipated by election day.

      Now, if something happens with Iran, that's a different story.

      “If you think I can be bought for five thousand dollars, I'm offended." Rick Perry.

      by Paleo on Wed Jan 18, 2012 at 06:47:04 AM PST

      [ Parent ]

      •  I Don't Ever Remember a Year.... (2+ / 0-)
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        tietack, askew

        ...when gas prices peak at Memorial Day.  I always recall paying more for gas in July than any other time.

        •  Seems fairly common (0+ / 0-)

          As this google search indicates:

          “If you think I can be bought for five thousand dollars, I'm offended." Rick Perry.

          by Paleo on Wed Jan 18, 2012 at 07:23:05 AM PST

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        •  6 year Gas Price Chart (2+ / 0-)
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          Mark27, Odysseus

          The 'summer' price peak varies from year to year - sometimes in May, other times in September.

          •  Seems reasonable (1+ / 0-)
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            Memorial Day/Labor Day driving peaks.  While there has been enough "noise" in oil/gas prices the last few years I don't think the cart looks unreasonable, and most all of it can be explained by peak driving season or economic/political factors.

            •  Yep -The current run-up has more to do with Iran's (1+ / 0-)
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              posturing in the Gulf than supply/demand issues.

              And then there's the other usual reasons market speculators use to drive up prices - the switch from winter to summer fuel, summer driving season, the random refinery fire, the threat of hurricanes in the Gulf... you name it, if they can make a buck on it, there's an excuse out there for driving up prices.

              •  Don't forget (1+ / 0-)
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                "Scheduled maintenance".  I always love that one, it always seems to happen at the biggest refinery, they never seem to announce maintenance at the smaller ones.

                •  Look what I found - today's excuse (1+ / 0-)
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                  The giant Hovensa oil refinery that has dominated the economy and part of the landscape of the island of St. Croix for decades will cease operations next month, the operator said Wednesday.

                  The company's website says it is still one of the 10 largest oil refineries in the world, but the closure is not expected to have a major effect on the oil industry


                  Here go the gasoline futures...

                  •  LOL (2+ / 0-)
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                    bear83, MichaelNY

                    Well there we go.  There's nothing new in 2012, which i think we'll see.  Sure we'll get the spike and it'll suck, but the world won't end.

                    I'm curious about how the Sunoco refineries in Philadelphia will end up.  Its looking like they might end up being retired and that could cause a decline in US refining capacity, though not enough to move the needle (520,000 barrels per day) that much.  

                    I think that's the next thing we'll see. It's Enron all over again, we'll see traders bribing refinery officials to have maintenance announcements and such and shut down refineries temporarily.  Combine this with corporations selling/closing refineries and we'll see some Enron attempts, though i think people are aware of this situation since Enron.

          •  Nice Chart...Thanks For Sharing (0+ / 0-)
    •  We'd be even more foolish (2+ / 0-)
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      Setsuna Mudo, Odysseus

      To believe in $5 gas, there's simply no evidence to support this.  The average price of $3.38 (today) to $5 is a 45%+ increase at a time of near-record high gasoline inventories and shrinking gasoline consumption with increasingly better fuel mileage vehicles being purchases.

      Then add in the fact that oil prices and gasoline prices are less correlated than ever and its near impossible to see how oil speculators could have any impact on prices.  Even gasoline speculators will struggle mightily to push a national average anywhere close to $5.

      •  The Oil Price Surges Of Every Year Since 2005.... (1+ / 0-)
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        Setsuna Mudo

        ....haven't made much sense looked through the prism of empirical data either, but they nonetheless have happened almost every year.  With unlimited potential landmines in the Middle East, all the ingredients are there (and then some) to motivate oil speculators with the same kinds of motivation that they've already been sufficiently compelled by to quadruple oil prices in the last several years.

        •  Quadruple when you pick a bottom (1+ / 0-)
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          Setsuna Mudo

          Oil prices of $120 today would need to be $30 to have quadrupled.  When was the $30 oil?  And is that a reasonable price anyways?

          Oil prices aren't going to spik to anything ridiculous.  We've had wars in main producing countries and gas never hot $5.  And that was without the inventories we see today.  Iran is nowhere near the threat the oil analysts would have you think.  Its pretty silly to think that Iran trying to stop the flow of oil won't be bombed into oblivion immediately.  

          You ever notice there's never a booming prediciton of $6 gas, it's always $5.  It's never $4.50 either, it's always $5.  Its because $5 is a round number, a psychological trigger point.  Nothing changed today from 6 months ago.  

          Iran just isn't that important to the price of US gas.  they can't actually stop the flow of oil, the US, China and other Arab nations won't allow it.  They are an island on this and literally have no allies, except maybe North Korea or Venezuela neither of which will help militarily in any Hormuz action.

            •  Ok (0+ / 0-)

              So its a quadrupling over the course of 9 years from obscenely low prices.  And the quadrupling is in almost no way the result of speculators, since $80-$100 per barrel oil is almost always the stated floor of producing nations since the invasion of Iraq.

              Couldn't I just as easily pick one of the high point in oil, during this same era of speculators, and claim speculators drove the price down?

              •  Obscenely Low Prices.... (1+ / 0-)
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                Oil prices of $31 the 2003 were the highest of any year in oil market history up until that point according to this chart.

                The $9 a barrel of 1998 could be argued as being "obscenely low" but $30 cannot.  That's why I used 2003 as a baseline as there had already been four years of uptick up to that point.  Any way you slice it, oil prices have quadrupled since 2003.  If I was to apply the aberration you allege, I'd say that oil prices have increased by more than 1200% since 1998.

                •  Yes it can (0+ / 0-)

                  China didn't exist as the oil consumer it does today.  

                  •  Good Luck Convincing Voters of This Nuance..... (0+ / 0-)

           the face of gas prices surging towards the $5 range.

                    •  Nothing is surging to $5 (0+ / 0-)

                      Its made up, there's no evidence a $5 national average is remotely going to happen.  Places like NYC and LA have seen $5 before and will again this year; the sky didn't fall, the world didn't end, and both states are solidly Democratic.

                      $5 gas is made up, always has been.  As I've discussed before, no one is predicting a $5 national average.  Since the peak high national average is $4.12 I don't think we can give $5 much credence nationally.  

                      it's not a nuance.  People paying $4 for gas in Ohio won't care if people in LA are paying $5.50.  And more importantly, people won't be paying $4 in Ohio permanently, it will be a typical spike and fade.

          •  And Whether Gas is $4.50 a Gallon or $5..... (0+ / 0-)

            ....Obama's re-election chances in either environment would be pretty low.

            •  Disagree (1+ / 0-)
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              Setsuna Mudo

              As stated these prices are predicted only in large cities and in solidly blue states.  there is no prediction for $5 national prices out there, just ridiculous scenario creation and arbitrary interpretations.

              I can make up scenarios where Obama loses the black vote (i.e. murdering the pope while repealing the 13th amendment of the constitution) but it's not based in reality.

              •  I Think You're Dramatically Underestimating..... (1+ / 0-)
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                ....the pull of the 15% or so of voters whose vote is determined on their basest urges.  That's why Reagan's "are you better off now than you were four years ago?" was so effective.  If it costs Joe Sixpack $100 to fill his truck on the way to the polls on November 4, he is far less likely to reward the incumbent....and there are few better measurements of financial duress for the peasantry than higher gas prices.

                •  I think we're not talking reality (1+ / 0-)
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                  $5 gas just isn't reasonable.  Will it be $4.20, yes, but that is a huge difference.  

                  And $4.20 will be a temporary national average.  By election day the prices will fall for sure.  $5 just isn't reasonable, its like a 50% increase in gas prices.

                  We're showing modest GDP growth with an annual average of $3.30-$3.40.  The highest prices are in already-decided states like AK, CA, HI, NY, IL, MI.


                  •  Again, It Doesn't Have to Be $5 Even.... (0+ / 0-)

                    ....if it's $4.50 or above, it's still going to be a millstone around Obama's neck of pretty epic proportions.  Now perhaps the Middle East will be contained and Eurozone and Chinese oil demand will be diminished enough to keep the speculators bearish and this won't play out, but I was Team Obama's reelection campaign I'd be counting on gas over $4.50 a gallon.

                    •  Well they're not (0+ / 0-)

                      $4.50 as a national average also won't be hit.  I'd be shocked if it got over $4.25 honestly, and that would be a peak for a week, not any serious length of time.

                      $4.50 would still be a 35%+ increase from today's prices.

        •  It's one area where Europe's troubles help us (5+ / 0-)

          Your concern is reasonable, so I took a quick look:

          European demand is slowing, and that will be a buffer to any oil price rise this year.

          In its monthly oil market report, the IEA lowered its first quarter 2012 demand forecast by 500,000 barrels a day after consumption fell in the fourth quarter 2011 for the first time since the end of the credit crunch.

          "I hope; therefore, I can live."
          For SSP users, see my Tips for Swingnuts diary

          by tietack on Wed Jan 18, 2012 at 07:32:15 AM PST

          [ Parent ]

          •  Good Point..... (2+ / 0-)
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            tietack, MichaelNY

            ....and perhaps just as consequential is slowing growth in China, which could also suppress oil demand.  Unfortunately, it's a double-edged sword as a declining China and Eurozone also slows our economy.

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