Results 1 to 4 of 4

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

  1. #1
    Senior Member Judy's Avatar
    Join Date
    Aug 2005
    Posts
    55,883

    Why rising gas prices won't last, even after Trump ends Iran nuclear deal

    Why rising gas prices won't last, even after Trump ends Iran nuclear deal

    Ken Fisher, Special to USA TODAY
    Published 1:00 a.m. ET May 20, 2018

    Scientists are warning about ongoing hazards from Hawaii's Kilauea volcano after a powerful eruption Thursday. And they say the volcano could become more violent, with conditions that could produce a larger explosion.

    Oil prices jumped after President Trump scuttled the Iranian nuclear deal, pushing gas prices higher. Will pump prices pummel your driving budget this summer — and thereafter?

    My research says no. Oil’s budget-bashing potential went the way of the eight-track. Recent price wiggles won’t last.

    Why?

    Americans routinely fear higher oil. Memories of disco-era oil shocks, gas lines and stagflation loom large, passed on as lore from my generation to our kids. Back then, the Middle East dominated oil, given OPEC’s embargo pricing power.

    But those days are dead.

    Iranians burn U.S. flags during an anti-American protest after weekly Friday prayer ceremony in Tehran, Iran, May 11, 2018. Iranians gathered to protest against the U.S. and President Trump after his withdrawal from a 2015 nuclear deal. Trump on May 8, announced the U.S. withdrawal from the deal on May 8. (Photo: STRINGER, EPA-EFE)

    Iran isn’t really crucial now. It produces about 4.5 million barrels of oil a day, exporting just 2.5 million barrels. U.S. crude production is now 10.5 million barrels a day and should reach 11.9 million barrels next year.

    Saudi Arabia has promised to help some, too. We and they more than offset the 1 million barrels-a-day reduction in Iranian exports officials expect from the return of sanctions. But realistically, Iran will export as much as before. As detailed in my April 15 column, single-country sanctions never bite. Companies work around them, diverting shipments through third parties for a minor brokerage commission mark-up. The only real change is altered shipping routes. Iran sells most of its oil to China, which is unaffected by these sanctions.

    To see how trivial Iran is for oil, note 2012 to 2016, when Western sanctions blocked Iranian oil exports to America and Europe. Oil prices plunged from more than $100 a barrel to $26 in January 2016. Perversely, in 2016, when Iran restarted exporting to Europe, prices rose. But other forces were dominating the market by then.

    Which ones? The U.S. technology revolution in oil shale, hydraulic fracturing (aka fracking), horizontal drilling and more. When those Iranian sanctions took full effect in July 2012, America produced just 6.3 million barrels a day of crude. By 2016 we were at 9.2 million barrels a day — a bigger increase than Iran’s total exports. That surge helps explain global production’s jump from 76 million barrels a day to 81.5 million in the same period, creating a global glut.

    In February 2016, with oil prices low, producers started cutting back because their profits were smaller. They mothballed rigs and slashed investment in new wells. Meanwhile, OPEC and Russia mostly stuck to their much-ballyhooed output cuts. Slower-growing supply and healthy global demand helped oil prices bounce back up.

    But that shift has gone too far, and the new trends driving the oil market are eye-popping. U.S. production rose in 2017. This year, new exploration rigs are operating 100%. Extraction technology keeps improving, cutting costs. Some oil fields are now profitable below $40 a barrel. Pumping at today’s $70 price produces premium profits. Capacity will gush. As this technology evolves, it starts rippling overseas, goosing output and capping crude prices.

    Still, don’t expect gasoline prices to get too low. They’re less variable than oil. Depending on the state, taxes are between 10.7% (Alabama) and 25.5% (Pennsylvania) of the per gallon price of regular gas. The average is about 16%, or 53.7 cents a gallon. Those taxes remain stable despite oil’s gyrations.

    Another factor is supply bottlenecks — especially in West Texas, where pipelines to Gulf Coast refiners are backing up. It will be tough to provide dirt-cheap gas everywhere without expanding capacity. Another irony: These regional bottlenecks create incentives for producers to drill more in North Dakota and Oklahoma, where similar bottlenecks in 2012 inspired pipeline bonanzas. Even more oil production will come there.

    Even so, gas prices should be OK for your 2018 vacation budget. The U.S. has the world’s greatest natural geography and low-cost vacation destinations. So enjoy them while Goldilocks reigns over our economy (see my May 6 column on that topic) and tune out the geopolitical noise. If you’ve never driven to Yellowstone, you really do owe it to yourself and your family.

    Ken Fisher is founder and executive chairman of Fisher Investments, author of 11 books, four of which were "New York Times" best-sellers, and is No. 200 on the Forbes 400 list of richest Americans. Follow him on Twitter @KennethLFisher

    The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.

    https://www.usatoday.com/story/money...ing/624390002/
    A Nation Without Borders Is Not A Nation - Ronald Reagan
    Save America, Deport Congress! - Judy

    Support our FIGHT AGAINST illegal immigration & Amnesty by joining our E-mail Alerts at https://eepurl.com/cktGTn

  2. #2
    Senior Member Judy's Avatar
    Join Date
    Aug 2005
    Posts
    55,883
    Michelle Wolf, Kanye West distract us from the good news about the economy

    Ken Fisher, USA Today Published 2:00 a.m. ET May 6, 2018 | Updated 8:01 a.m. ET May 7, 2018

    The Dickens oif 10 years ago wasn’t the worst of times. Financial crisis! Recession! Decimation of the world’s retirement savings! The Dickens if now isn’t the best of times.

    Yet almost no one recognizes it. Pundits grouse about growth-induced inflation looming. Europeans fear economic deceleration and deflation. Everyone fears politics.

    Yet our global GDP growth of 3% isn’t too hot or too cold — it’s Goldilocks’ perfect porridge. Just right.

    But we’re a worrying world. And in early 2018, stock market gyrations and political noise are distracting us the way shiny objects lure fish. I’ve no clue how long we’ll remain distracted. Maybe until after our mid-term elections?

    What shouldn’t worry us is the financial picture. Overall U.S. inflation is low, just 2%, and it’s slightly lower globally. All major segments of America’s economy are growing smoothly. All major countries are growing synchronously for the first time in this economic cycle. Unemployment is lower than in all but a few months since 1970.

    Folks who abandoned America’s labor force long ago are finally flocking back. By that I mean the chunk of non-workers, aged 25 to 54, who gave up seeking jobs (and hence aren’t counted in official unemployment — the inverse of what’s called the “Labor Force Participation Rate”). These returning workers can expand business capacity, helping communities grow from Maui to Miami.

    Egghead economists (who never predict anything accurately) believe low unemployment plus increasing economic growth presage much higher inflation and long-term interest rates. Wrong. This theory, originally called the Philips Curve, was disproved decades ago. But economists are super-slow to learn — way too ivory-towered. Because of them, folks fear that rising inflation will boost long-term interest rates. The 10-year Treasury yield’s flirtation with 3% drives 'em nuts.

    But labor market pressures never drive inflation. So what does? The answer is this: the broad quantity of money growing faster than GDP (the total of goods and services we create). Plain. Simple. See my Nov. 5 column for a deeper explanation.

    That money, technically called M4, has been Goldilocks-like, too. It’s been growing, but slower and more moderately in this economic expansion than in any expansion of your lifetime — even if you’re really old. It’s why inflation remains low and will continue to remain so. And, hence, so will inflation’s contribution to long-term interest rates.

    Michelle Wolf’s monologue at the White House Correspondents' Dinner and Kanye West’s tweets can hog headlines for days, keeping us distracted. People keep envisioning troubles. As I said, when the 10-year Treasury yield touched 3%, investors went bananas. It rose from 2.8% to 3% in about a month. But look back at history. We’ve often experienced hugely higher jumps from absolutely higher beginnings without anything bad happening at all.

    If a 2/10ths of 1% increase in long-term interest rates makes it unprofitable for any borrower to use money, for building a chemical plant or buying a house, for instance, or if it makes that borrower un-credit worthy somehow — no bank should be lending to them anyway. This is why minor interest-rate wiggles never have a big impact, good or bad.

    I love how this Goldilocks world seems so invisible to everyone (particularly to central banks like our Federal Reserve, who never, ever foresee anything right). If you Google the definition of Goldilocks economy, you’ll find that we are living in one now. A Goldilocks implies that stocks will rise.

    So once we stop worry wiggling and stocks can stop zig-zagging, we will cross a classic bull-market divide. Sir John Templeton said it this way: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Through this sentiment cycle, stocks climb a proverbial and legendary “wall of worry.”

    Stocks rise up that wall as reality disproves prior fears. Today’s too hot/too cold worries are bricks in the wall. Reality is splendid, and it always wins.

    So be greedy when others are fearful and fearful when others are greedy. With fearful folks blind to Goldilocks, be greedy. Own stocks. The right time to be afraid is when almost no one else is.

    Ken Fisher is the founder and executive chairman of Fisher Investments, author of 11 books, four of which were "New York Times" bestsellers, and is No. 200 on the Forbes 400 list of richest Americans. Follow him on Twitter @KennethLFisher

    The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.

    https://www.usatoday.com/story/money...omy/578754002/
    A Nation Without Borders Is Not A Nation - Ronald Reagan
    Save America, Deport Congress! - Judy

    Support our FIGHT AGAINST illegal immigration & Amnesty by joining our E-mail Alerts at https://eepurl.com/cktGTn

  3. #3
    Senior Member JohnDoe2's Avatar
    Join Date
    Aug 2008
    Location
    PARADISE (San Diego)
    Posts
    99,040
    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


    Sign in and post comments here.

    Please support our fight against illegal immigration by joining ALIPAC's email alerts here https://eepurl.com/cktGTn

  4. #4
    Senior Member JohnDoe2's Avatar
    Join Date
    Aug 2008
    Location
    PARADISE (San Diego)
    Posts
    99,040
    Gas prices soar on Memorial Day weekend. These places are hit hardest.

    by Jackie Wattles @jackiewattles
    May 27, 2018: 10:40 AM ET

    Gas prices have soared, and some areas of the country are feeling it more than others.

    The sharpest price hikes have hit the Midwest. Over the past month, the average price per gallon of gas in Michigan has shot up 32 cents, more than any other state. Its statewide average recently hit $3.15, according to data from GasBuddy, a platform that tracks real-time prices at stations across the country.

    North Dakota's gas is $2.96 on average, about 29 cents higher than a month ago. And Wisconsin's gas hit $2.94 per gallon, a 28 cent increase. Wyoming, Minnesota and Ohio round out the top six.


    The national average price per gallon of regular is creeping toward the $3 mark, making it the most expensive for a Memorial Day weekend since 2014, according to the American Automobiles Association.


    Soaring gas prices can be attributed to factors like oil production cuts orchestrated by OPEC and Russia, Venezuela reducing output, and the United State's decision to leave the Iran nuclear deal.


    Related: Gas prices are up 31% from last Memorial Day. Here's why

    All that may seem pretty far removed for vacationers that are hoping to kick off the unofficial start of summer relaxing at the beach. But if that beach is in California, chances are the most expensive pump prices in the country are nearby.


    The West Coast typically has the most expensive gas. Geography, high demand and clean air regulations contribute to the price per gallon. Folks in some areas, such as San Francisco, are seeing prices near $4 per gallon.



    Prices at the pump haven't been this high for Memorial Day weekend since 2014, when crude was sitting in triple-digit territory.The American cities that have seen the steepest price increases at the pump are also speckled across the Midwest.

    In Toledo, Ohio, gas prices have climbed 41 cents, and just across the border in Monroe, Michigan, residents have seen a 40 cent increase.


    Monroe City Council member Kellie Vining told CNNMoney that she's "heard a lot of complaining" about gas prices — and, for some, it's putting a damper on the holiday weekend.


    She said she spoke to a local farmer who canceled his annual Memorial Day weekend vacation to Michigan's Upper Peninsula "directly due to the increase in gas prices."


    "I represent a working class neighborhood and I am concerned for my constituents ability to keep up with the high gas prices, especially when coupled with the other utilities and insurance," Vining said in an email.


    Related: Saudi Arabia says OPEC and Russia to pump more oil 'in the near future'


    Patrick DeHaan, head of petroleum analysis at GasBuddy, says it's really a matter of bad timing that has made price increases seem so dramatic in the Midwest.


    Gas prices tend to cycle through highs and lows, and it just so happens stations in the heartland were at the low end of that pricing cycle a month ago. So, it's made the recent price hikes seem more pronounced.


    There's no sign that pricier gas will have a significant overall impact on the number of people heading out for a drive this holiday weekend.


    AAA predicts 36.6 million people will be on the roads, about 4.7% more than Memorial Day weekend in 2017.


    Not a single state is projected to see a decrease in the number of people traveling by car, according to an AAA spokesperson.

    http://money.cnn.com/2018/05/26/news...end/index.html
    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


    Sign in and post comments here.

    Please support our fight against illegal immigration by joining ALIPAC's email alerts here https://eepurl.com/cktGTn

Similar Threads

  1. In Leaving Iran Deal, Trump Ends Obama’s Legacy of Appeasement
    By lorrie in forum Other Topics News and Issues
    Replies: 0
    Last Post: 05-08-2018, 08:01 PM
  2. Rep. McCarthy: Trump Can Negotiate Better Deal to Prevent Nuclear Iran
    By Judy in forum Other Topics News and Issues
    Replies: 1
    Last Post: 05-08-2018, 07:59 PM
  3. Replies: 0
    Last Post: 05-02-2018, 03:00 AM
  4. Iran nuclear deal 'won't outlast Trump's first term' in office
    By Judy in forum Other Topics News and Issues
    Replies: 0
    Last Post: 03-30-2018, 02:30 AM
  5. Replies: 4
    Last Post: 09-20-2017, 11:40 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •