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Page added on July 4, 2018

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Fourth of July holiday gas prices hit 4-year high

Consumption

Fourth of July gas prices will notch their highest mark since 2014 but remain sharply lower than their all-time high for the holiday.

At about $2.86 per gallon as of Tuesday morning, the national average price of gasoline is about 63 cents higher than a year ago, according to AAA.

Prices have been stable over the last week but have fallen by 9 cents in the last month as the commodity eases off its typical spring peak.

Higher oil prices, caused largely by continued production limits at the Organization of the Petroleum Exporting Countries, have nudged gas prices near the $3 mark this year.

The price spike since 2017’s Independence Day is likely to cost motorists about $1 billion in extra gas purchases over the usual four-day travel period, according to fuel-station-finding app GasBuddy’s petroleum analysts.

“Even with high gas prices, however, most motorists aren’t likely to curtail their travel during the most popular summer holiday,” according to GasBuddy.

More: Trump tariffs could add $5,000 to price of new vehicle in U.S.

More: Iran warns against oil production boost after Trump tweet

More: Americans will spend a little less on the Fourth of July this year

Put simply, it would take much bigger increases for Americans to significantly curb their driving habits.

For starters, it’s only a four-year high. In 2014, Fourth of July prices hit $3.66. In 2008, they hit an all-time high for the holiday of $4.09.

Some states are feeling more pain than others, however. Hawaii was in the worst shape Tuesday with prices averaging $3.90, according to GasBuddy.

South Carolina had the cheapest gas at $2.52.

USA Today



16 Comments on "Fourth of July holiday gas prices hit 4-year high"

  1. Boat on Wed, 4th Jul 2018 3:10 pm 

    I know of two gas stations north of Houston with gas at $2.49 per gallon.

  2. Boat on Wed, 4th Jul 2018 3:13 pm 

    Mak

    Your choice for US prez continues to unimpress. Tell me about solar powered Hillary again.

  3. Outcast_Searcher on Wed, 4th Jul 2018 3:27 pm 

    Yeah Bob, let’s pretend Venezuela accounts for more global demand every year. Oil prices are the highest since the fall of 2014.

    Global supply and demand. Maybe, just maybe that has a wee bit to do with it.

    Blame Iran, given recent news, would at least make more sense on the margin.

  4. Davy on Wed, 4th Jul 2018 3:44 pm 

    Big deal, wake me up at $5.

  5. BobInget on Wed, 4th Jul 2018 4:08 pm 

    Doubtless China NEEDS that Venezuelan oil.
    In fact between China and Indi’s needs the remainder of the world can take a hike.

    BREAKING

    China Throws Venezuela’s Oil Industry A $5B Lifeline
    As we say in Spanish – Dinero perdido

    By Irina Slav – Jul 04, 2018, 9:30 AM CDT
    China’s Development Bank has approved a US$5-billion loan for Venezuela’s oil industry, Bloomberg reports, quoting the troubled South American country’s Finance Minister Simon Zerpa.

    “We’ve received the authorization for a direct investment of more than $250 million from China Development Bank to increase PDVSA production, and we’re already putting together financing for a special loan that China’s government is granting Venezuela for $5 billion for direct investments in production,” the official said.

    The loan is literally a lifeline for PDVSA, which has been unable to stop an accelerating production decline resulting from years of mismanagement and a cash crunch brought about by the tightening grip of U.S. sanctions.

    International Energy Agency figures suggest Venezuela produced an average 1.36 million barrels of oil daily last month. This is down from 2.9 million bpd five years ago. President Maduro vowed to increase production by 1 million bpd by the end of the year, but he admitted that the goal would be difficult to meet.

    It became even more difficult after ConocoPhillips seized PDVSA storage facilities in the Caribbean, keeping it from meeting its export obligations and creating tanker bottlenecks at Venezuelan ports.

    PDVSA’s exports to China also suffered as a result of the quickly deteriorating situation. Shipping data from Reuters last month suggested that these could have plummeted to an eight-year low. This would have provided additional motivation to China to lend Venezuela a hand with growing its oil production.
    Related: Saudi Arabia Won’t Bring 2 Million Bpd Online

    As a major creditor and ally, China is sure to benefit from some preferential oil export conditions amid rising international prices that would ensure its continued backing of Caracas.

    “One of the best things about Venezuelan oil was its stable volumes for all these years and competitive prices,” a senior Chinese oil industry official with direct knowledge of the Venezuelan supply issues told Reuters last month. “But now they seem in very bad shape, not having the money to upgrade port facilities, no money even to remove the high water content in crude oil.”

  6. BobInget on Wed, 4th Jul 2018 4:26 pm 

    Not a single comment on Trump’s invasion threat?

    China Throws Venezuela’s Oil Industry A $5B Lifeline

    A few thoughts on the news:

    1. Like Trump’s invasion threat, this is going to be a big windfall for a number of Venezuela’s govt. officials.

    2. China just bought a lot of crude at wholesale…and if they are smart, they will send their own ships to pick it up.

    3. With the huge decline in the ranks of competent PDVSA operational employees, who’s going to do the actual work?

    4. Will Conoco get money out of this in return for the assets?

    5. China is acting despite the USA purposely trying to starve Venezuela to effect regime change, so it is logical to expect significant help
    from Russia and Iran.

    So, Instead of Trump sending US Troops, China, Iran, India and Russia send oil workers.

    Don’t expect ANY increase in exports for at least 12 months. So much equipment has been stolen
    vandalized, worn out, Venezuela will need another
    five billion to restore full production.
    BTW, Davy. USA will get zero imports according to
    this new Chinese loan agreement.

  7. BobInget on Wed, 4th Jul 2018 4:30 pm 

    Why can’t the U.S. just invade Venezuela? U.S. official says Trump stunned security aides with question
    The idea, despite his aides’ best attempts to shoot it down, would nonetheless persist in the president’s head

    http://calgaryherald.com/news/world/us-official-trump-pressed-aides-about-venezuela-invasion/wcm/c1c701ed-7e34-4412-b781-54cf9d11409e?utm_term=Autofeed&utm_c

  8. Makati1 on Wed, 4th Jul 2018 5:21 pm 

    Boat: “Your choice for US prez continues to unimpress. Tell me about solar powered Hillary again.”

    I did not vote for anyone for the last 20+ years. There is only one political party in the Us. The Oligarch Party. They choose the Prez. Billary is insane and would have us in a world war in a heartbeat. Trump is arrogantly destroying the ‘One World’ organization. I prefer that to nuclear war, don’t you?

  9. shoal on Thu, 5th Jul 2018 6:31 am 

    “Looming Dollar Shortage Getting Worse As Emerging Markets Implode”
    https://palisade-research.com/looming-dollar-shortage-getting-worse-as-emerging-markets-implode

    “One of the most important macro-situations that’s developing right now is the looming U.S. dollar shortage. I don’t mean in the sense that banks don’t have enough dollars to lend out – I’m talking about the foreign sovereign markets. Here are some of the things that’s causing liquidity to dry up. . .1. Soaring U.S. deficits – the United States’ need for constant funding is requiring huge amounts of capital 2. A strengthening U.S. Dollar – which is weakening the rest of the worlds currencies 3. Rising U.S. short-term rates and LIBOR rates – courtesy of the Federal Reserve’s tightening 4. The Fed’s quantitative tightening program – unwinding their balance sheet by selling bonds These four things are making global markets extremely fragile. . .”

  10. Antius on Thu, 5th Jul 2018 7:00 am 

    Good post Shoal.

    1. Emerging market currencies are weakening against the dollar (especially India and China).
    2. These economies are heavily steeped in debt, foreign debt in the case of India, which is progressively more expensive to repay with dollar tightening.
    3. Both countries are large importers of energy and other physical resources, which must either be paid for with dollars, their own weakening currencies, gold or barter.
    4. US trade tariffs will slowly strangle the real income from exports, which must be cheapened either in real terms or by currency devaluation to maintain production volumes and keep up employment.

    These ugly trends, along with the slowly ticking time-bomb of conventional oil and gas depletion, will strangle these economies.

    The link below provides an interesting energy-economic model, which generally suggests that real prosperity has declined since 2000 across the western world and China is the most vulnerable nation in terms of debt-prosperity imbalance.

    https://surplusenergyeconomics.wordpress.com/

    The approaching debt-energy depression is going to cause huge amounts of human suffering, because central banks have exhausted their ability to mitigate the problem in any way.

  11. JuanP on Thu, 5th Jul 2018 9:46 am 

    I think that oil prices will keep increasing until the next global recession. There will be ups and downs along the way, but the general trend is up. The time of reckoning is getting closer. Will the boom last until the next US presidential election? I am amazed of how long they’ve managed to keep it going. The next global financial recession is likely to be memorable; a lot of “wealth” needs to get wiped out.

  12. Makati1 on Fri, 6th Jul 2018 5:40 am 

    “Whereas for the global GDP per capita, the point at which growth disappeares is more than 60 years into the future, for GDP per capita in the OECD nations, the point is brought forwards dramatically. In less than a decade, on current trends, there would be no growth at all in GDP per capita across the OECD nations.”

    https://www.zerohedge.com/news/2018-07-06/long-crisis-looms-uk-govt-economic-advisor-warns-growth-ending

    “We are already seeing the destabilising social and political impacts of this situation. The rise of Trump, his turn to neo-fascist policies toward Black and ethnic minorities, immigrants and Muslims, and his alliance with far-right extremist networks in Europe — all driven by an alarming resurgence of populism across both sides of the Atlantic — are direct symptoms of a new economic reality of slowly dying growth:”

    Slip slidin’…

  13. Antius on Fri, 6th Jul 2018 7:15 am 

    “We are already seeing the destabilising social and political impacts of this situation. The rise of Trump, his turn to neo-fascist policies toward Black and ethnic minorities, immigrants and Muslims, and his alliance with far-right extremist networks in Europe — all driven by an alarming resurgence of populism across both sides of the Atlantic — are direct symptoms of a new economic reality of slowly dying growth:”

    In other words, people no longer willing to tolerate things that should have been intolerable to begin with. The anaesthetic of growth is wearing off and the peoples of Europe and North America are realising that they are being conned. Nafeez Ahmed (fine English name) would like us to believe that that is part of the problem, rather than part of the solution.

  14. shoal on Sat, 7th Jul 2018 6:32 am 

    “Russell Napier: “Trade War Is The Beginning Of A New Global Monetary System”
    https://www.zerohedge.com/news/2018-07-06/russell-napier-trade-war-beginning-new-global-monetary-system

    “Investors need to prepare for a formal widening of the trading bands for the RMB relative to its basket and the problems such a move will create for all emerging markets. That first move in the RMB is inherently deflationary. This is no counter-punch in a trade war; it is the beginning of the creation of a new global monetary system. While many investors now concede that an emerging market debt crisis is likely, few are prepared to concede that China will be caught up in it. China is always seen as different and of course, in many ways, it is. It may well manage its exchange rate against a basket of currencies, dominated by the USD, but it has tools to manage this relationship that most countries do not. Its exchange controls allow it to manufacture a capital account surplus, although those controls are not a perfect dam for capital outflows. By creating a larger capital account surplus than would otherwise occur, China maintains the total external surplus that leads to rising foreign exchange reserves and hence growing domestic commercial bank reserves. It thus extends the period of growth. Also, the state owns the commercial banking system and so can force it to keep lending, thus continuing to create RMB, when the growth in commercial bank reserves would dictate more moderate credit growth in a truly private banking system. While these tools allow China to extend the business expansion within the managed exchange rate regime, they do not permit it to abolish the business cycle. If it were so, everyone would be adopting similar policies. At least since the time of David Hume (died 1776) and probably since Richard Cantillon (died 1734), we have understood how the downtrend in the business cycle is enforced in an exchange rate management regime. It is inevitable, in such a regime, that the enforced excess creation of money leads to a deterioration of the external accounts, an end to money creation and slower growth, often accompanied by deflation. There are natural forces at work within a managed exchange rate that cannot be resisted. Nobody yet has found a way to obviate that cycle, though many have extended it. China’s ability to use its capital controls and commercial banks’ balance sheets to temporarily override those natural forces has now come to an end. The ability of China to extend the cycle has come to an end as the current account surplus has all but evaporated – a natural consequence of extending the growth cycle by keeping money too loose when the external account deterioration dictated that it should be kept tight. It has come to an end as the capital account is at best in balance rather than surplus. It has come to an end because the RMB is primarily linked to a strong currency in the form of the USD. It has come to an end because the Fed is both raising interest rates and destroying high-powered money to the tune of USD360bn a year. It has also come to an end because Jay Powell has warned China, and other emerging markets, that he will not alter the course of US monetary policy to assist with any credit disturbances outside his own jurisdiction.”

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