The Return Of Oil Price Shock

[Purveyor]

Source: CNN MONEY

Higher energy prices are a sign the economy is getting better. But with oil nearing $80 and gas inching toward $3, some fear a further spike could derail a recovery.

By Paul R. La Monica, CNNMoney.com

NEW YORK (CNNMoney.com) -- Oil prices are back around $80 a barrel for the first time in nearly a year. But is that good news or bad news for the economy? Let the debate begin.

Of course, the knee-jerk reaction is to declare that rising oil prices must be a bad sign. After all, increased energy prices could be considered the equivalent of a big fat tax increase for an already cash-strapped consumer.

Even though people don't have to pony up four Andrew Jacksons to buy an actual barrel of oil, rising crude prices obviously hurt consumers at the pump.

And in just the past week the nationwide average price of a gallon of gasoline increased by 10 cents, or about 4%, to $2.58, according to motorist group AAA.

On the other hand, oil prices were hovering around a low of near $30 a barrel back in February. And at that time, the average price of gas was below $2 a gallon. But how good did you feel about the economy back then?

Read more: http://money.cnn.com/2009/10/20/markets/thebuzz/index.htm

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Our local mid-michigan prices jumped to $2.79 today. Was $2.53 yesterday.

[LearnedHand]

1. Can't think of strong enough swear words

Bastards. Yet another way the extremely wealthy shift dollars to the upper-upper class.

[bbinacan]

2. Oh great

I just bought a Jeep Wrangler Unlimited Rubicon. MPG is 15-19.

[taterguy]

3. Obviously they noticed and jacked the price up

On behalf of everyone else, thanks for nothin' pal.

[bbinacan]

7. Look tater

I am fortunate enough to get paid the IRS rate of $.55/mile and my work requires a sturdy 4-wheel drive. I acquire easements for infrasture.(Are you related to tater salad?).

[wuvuj]

17. And just how bright was that?

...

[Skink]

4. Went for a scenic drive today.

hadn't done that in 2 years. Now no more driving.

[Mari333]

5. There goes everyone's holidays.

which were already in the crapper.

[sweetloukillbot]

6. In AZ prices have been plummeting for a few weeks

Was around $2.70 at Labor Day, now around $2.30.

[classysassy]

16. Ft Huachuca and Sierra Vista

$2.25.

[rasputin1952]

8. Every time you fill up w/foreign oil/gas...

you are giving them the money they use against us...no one seems to be able to figure that out...:(

[bbinacan]

10. FYI on US imports

Total Imports of Petroleum (Top 15 Countries)
(Thousand Barrels per Day)
Country Jul-09 Jun-09 YTD 2009 Jul-08 YTD 2008

--------------------------------------------------------------------------------

CANADA 2,639 2,529 2,450 2,417 2,506
MEXICO 1,316 1,183 1,280 1,292 1,306
SAUDI ARABIA 1,153 959 1,095 1,690 1,554
VENEZUELA 959 1,237 1,147 1,329 1,193
NIGERIA 879 830 708 822 1,052
RUSSIA 637 578 637 572 491
BRAZIL 392 299 361 275 251
IRAQ 365 374 455 696 677
ALGERIA 329 458 462 456 526
ANGOLA 320 447 513 652 527
COLOMBIA 305 313 286 192 203
VIRGIN ISLANDS 273 268 301 294 330
KUWAIT 261 179 187 122 209
UNITED KINGDOM 188 268 252 187 218
UNITED ARAB EMIRATES 161 75 64 0 0

Note: The data in the tables above exclude oil imports into the U.S. territories.

[taterguy]

12. So what are we supposed to do, not fill up at all?

How are we supposed to get to work?

[rasputin1952]

13. No, but alternatives are underfunded...

it would cost the major automakers $100 to revert to flex-fuel. I have a flex-fuel vehicle, E-85 is at $1.99 a gallon, it is homegrown and I save $.57, ($2.56 for E-10), for each gallon I purchase, which comes out out just about $19 per tankful in savings.

We are well behind the curve.

[wuvuj]

18. Better check your manual?

My sister bought a Chevy HHR...gets 39% less gas mileage on E85. So at $2.56 for E10...E85 would have to be under $1.56 for there to be any advantage to using it...unless you like refilling almost 2xs as often. Do the math? You missed the curve....

[rasputin1952]

14. There is a push for E-15, the gas companies are fighting tooth and

nail against it. E-15 will NOT harm any vehicle on the road today...but see the $100 conversion figure above to make virtually every vehicle capable of using E-85.

FWIW...I have a degree in renewables, and follow the industry religiously.

[msaroff]

9. Normally, I'd Be worried,

But it's Paul La Monica, and he is right about as often as a stopped clock.

Besides, an oil price shock would give a boost to carbon taxes, because it could be cast as getting off of foreign oil.

[endless october]

11. of course it's bad news.

it's not high because the economy is doing better. it's high because the dollar is slipping and the bailed out financial institutions see that they can make a quick buck by driving the price of oil up.

meanwhile, expensive energy slows down any recovery.

[BumRushDaShow]

15. They are speculating again.

Got bored with gold.... :eyes: