Posts

‘Can’t Even Give It Away’: Gasoline at $1 Is Warning for Economy

/0 Comments/in , /by

London, Kentucky, became the first U.S. city to see pump prices fall below $1 a gallon as coronavirus-related lockdowns halt transit across the country — and it won’t be the last.

Several others are poised to join the club in the coming days as the pandemic crushes fuel demand and sends the economy to the brink of a recession. While cheap fuel usually spurs gas-guzzling Americans to hit the highways, the latest downturn in prices portends dark times ahead.

“You almost can’t even give it away,” said Paul Bingham, head transportation economist at IHS Markit Ltd. “The price elasticity has totally changed. It’s full-on demand destruction.”

Nationwide, pump prices are headed for depths not seen since the Great Recession. Retail gasoline is expected to average $1.99 a gallon in the next two days and fall as low as $1.49 by mid-April, the lowest level in 16 years, according to Patrick DeHaan, head of petroleum analysis at Gasbuddy.

The downturn comes as large swathes of the country are under containment orders in an effort to curb the virus that’s killed more than 15,000 people globally. U.S. unemployment could rise 30% this quarter while the GDP may drop by 50%. In that environment, low gasoline prices won’t induce consumption in the way it typically does, and may instead be yet another indicator of a struggling economy. (Read more from “‘Can’t Even Give It Away’: Gasoline at $1 Is Warning for Economy” HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE

Gas Prices in This State Surging to 5-Year High

/0 Comments/in , /by

California residents are paying much higher prices at the pump compared with the average U.S. resident.

As of Thursday, the average gasoline price in the state was about $4.02, according to AAA, compared with the national average of $2.83.

Those are the highest prices California has seen since 2014. Prices have risen around 68 cents per gallon over the course of a month.

What’s driving prices to multiyear highs? According to Dan McTeague, a senior petroleum analyst at GasBuddy, it’s a supply crunch resulting from refinery upsets in Los Angeles and San Francisco.

“California’s unique gasoline standard means replacements for the shortfall in production aren’t easily found and … explains why drivers there have seen gasoline prices spike nearly 68 cents a gallon in just a month,” McTeague told FOX Business. (Read more from “Gas Prices in This State Surging to 5-Year High” HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE

Gas Prices Fall to 12-Year Low Under Trump Presidency

/1 Comment/in , /by

The recent drop in the cost of oil has been a happy surprise for drivers, who are enjoying the cheapest gas prices at the start of summer in 12 years.

Oil prices have dipped into bear market territory and gasoline prices have followed, falling every day since June 2, according to AAA. The average price nationally for a gallon of regular is now $2.28, down 10 cents since the start of the month.

And the outlook for the rest of the month is good: Wholesale gas prices suggest that prices drivers pay will keep falling, and this weekend could bring the cheapest prices so far in 2017, said Tom Kloza, chief oil analyst for the Oil Price Information Service, which tracks pump prices for AAA. (Read more from “Gas Prices Fall to 12-Year Low Under Trump Presidency” HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE.

The Untold Problems of Cheap Gasoline

/5 Comments/in , /by

When most people see cheap prices at the gas pump, they only think of how it benefits their wallet. Full Measure correspondent Scott Thuman notes gas prices are the lowest since 2009, but there’s a price to pay for saving at the pump.

“Gas prices in the U.S. are averaging $1.80 a gallon, more than a dollar less from the peak last year,” says Thuman. “In many American households, cheaper gas goes a long way toward balancing the family budget; but for hundreds of thousands of families tied to the industry, they’re paying a high price for low-cost oil.”

The gauges at the gas pump are spinning lower and lower. Current prices are under $2 a gallon in most states. The jaw-dropping cheap prices even became a major bragging point in President Obama’s recent state of the union address. “Gas under two bucks a gallon ain’t bad either,” the president quipped . . .

The current oil bust is rattling stock markets around the world. U.S. stocks produced their weakest start in January since 2009. Patron says cheap oil could also impact the banking sector; and that, too, is contributing to a jittery stock market.

“Particularly the independent companies that are active in the U.S shale,” said Patron, “that borrowed heavily to finance their production. Prices have dropped, revenue has dropped, and so they could default on these loans. If that happens, banks could be left with billions of dollars of bad loans. The bond holders could lose their investment; and this increases the risks associated with investing and markets at a time when there’s already heightened concern about China.” (Read more from “The Untold Problems of Cheap Gasoline” HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE.

Gas Price Fallout: People Trading in Hybrids for SUVs

/7 Comments/in , /by

Photo Credit: CNN Money

Photo Credit: CNN Money

With gas prices low, more people are trading in their hybrid and electric cars for purely gasoline-powered vehicles, including SUVs.

So far this year, only 45% of people that traded in an environmentally-friendly hybrid car purchased another, according statisticians at Edmunds.com. In 2012, that figure was over 60% and this is the first time it has ever fallen below 50%.

“For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment,” Edmunds.com Director of Industry Analysis Jessica Caldwell said in a statement . . .

Back in 2012, gas prices peaked at $4.67 a gallon. At that price, it would take five years for owners of a hybrid-powered Toyota (TM) Camry to make up for the $3,770 price differential with the brand’s gasoline-powered model. But with today’s gas prices at $2.27 a gallon, it would take about 11 years . . .

Besides the lack of economic incentives, there’s not much social incentive to purchase a hybrid car anymore, Caldwell said. The technology has become more mainstream, and a hybrid badge on the trunklid doesn’t make a statement anymore. (Read more from ” Gas Price Fallout: People Trading in Hybrids for SUVs” HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE.

Duopoly in Action: Dems and GOP Agree it’s a Great Time for a Gas Tax Hike

/5 Comments/in , /by

You might have noticed the spectacular collapse of global crude oil prices reflected in the commensurate reduction of your weekly gasoline bill. Gas prices are lower, much lower, than they were just a few months ago. For Washington D.C., that represents an opportunity. Even for congressional Republicans, even a little bit more money in your wallet presents a chance to hike your taxes.

On Wednesday, the new GOP chairman of the Senate Environment and Public Works panel, Sen. James Inhofe (R-OK), said a hike in the gasoline tax is on the table as a means of paying into the Highway Trust Fund. As President Barack Obama would no doubt note, that fund is of vital importance for keeping the nation’s roads and bridge up to code.

“It’s not a tax,” Inhofe said. “It’s a user fee.”

Outside Beltway, that’s a distinction without a difference.

Inhofe’s embrace of a new, ahem, “user fee” for those who purchase the gasoline was shared by the new Senate Finance Committee Chairman Orrin Hatch (R-UT). “We’ll have to look at that. I’m looking at everything—every possible way of taking care of the highway bill,” Hatch echoed. (Read more about the gas tax hike HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE.

With Fuel Prices Plummeting, Why Do Airfares Remain High?

/0 Comments/in , /by

Credit - Fox News

Credit – Fox News

First time in more than five years, you can actually smile when you fill up, as gas prices fall below $2.80 per gallon.

You aren’t smiling, though, when you go online or call a travel agent to book an airline ticket these days. Prices seem to know only one direction: up. It’s not just the price of the ticket, as consumers get hit with a myriad of fees that know no limit.

If you want to board early you’ll have to pay up. Want a seat that won’t crush your knees and you’ll have to pay up again. How about food? There’s a fee there too.

With airlines earning record profits this year, while their fuel costs are plummeting, you’d think you might actually get a break on your next flight. Think again…

There’s a little bit of hope on the horizon as airfares are forecast to drop in 2015, but don’t get too excited. We are looking at an average drop in fares of 5 percent after some markets have seen their fares go up by 70 percent or more over the past two years.

Read more from this story HERE.