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US INFLATION
GASOLEIE PRICES INFLATION ... Gas Prices Jump 33 Cents in Past 2 Weeks, Some Analysts See $6 per Gallon by August 
A man pumps gas in Irvine, Calif., on April 1, 2022. (John Fredricks/The Epoch Times) Original article: https://www.theepochtimes.com/gas-prices-jump-33-cents-in-past-2-weeks-some-analysts-see-6-per-gallon-by-august_4483813.html Burgess COMMENTARY This article is really not news ... it is better described as 'gossip'. I was introduced to the subject of inflation at Cambridge when I was a student around 1960. One of the core elements around inflation was whether prices were being driven by 'cost-push' or 'demand pull'. When I was progressing in my career in the 1970s the inflation of that time was mainly driven by 'cost-push'. The OPEC oil cartel started constaining supplies of crude oil in 1973 forcing buyers to pay $13.50 a barrel, substantially more than the prevailing $3.50 a barrel prior to the oil supply boycott. By the end of the decade OPEC had forced the price up to around $30.00 a barrel. For every user of crude oil around the world this represented a massive 'cost-push' inflationary pressure ... and the US was probably the most adversely effected of all countries because it was the most energy inefficient of all major countries. Most countries in Europe, for example, had imposed high taxes on petroleum energy years before and per capita household energy consumption and industrial consumption was way lower than in the United States. Bottom line ... US industry was faced with a catastrophic decline in profitability which drove price increases for customers and therefore inflation. There was very little users of energy could do about this. Transportation, household heating and cooling, general manufacturing, etc. all required energy, and the worldwide cost of energy was being controlled by OPEC. The problem might have been mitigated somewhat if none OPEC actors had behaved in a different manner ... but they did what did without very much push-back from the public (and especially via the media). Countries like the UK and the Netherlands did not vigorously oppose the OPEC price increases ... this was probably because their investments to develop North Sea oil and gas would not be viable unless global price increases took place. All the big integrated oil companies may have talked about the OPEC crisis, but in practice they were getting set uo to be much more profitable going forward than they had been in the past. Bottom line ... the energy industry drove massive inflation in the 1970s and profited mightily at the expense of everyone else. The modern energy industry is more complex than it was in the 1970s, but inflation this time around is driven my demand pull and not so much cost-push. Peter Burgess | ||
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INFLATION ... Gas Prices Jump 33 Cents in Past 2 Weeks, Some Analysts See $6 per Gallon by August
Written by Tom Ozimek ... Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The Associated Press contributed to this report. May 23, 2022 ... Updated: May 23, 2022 The average price of regular-grade gasoline spiked 33 cents over the past two weeks to $4.71 per gallon, according to the Lundberg Survey, which comes as some analysts predict prices will climb above $6 a gallon by the end of the summer. Industry analyst Trilby Lundberg of the Lundberg Survey said on May 22 that the price jump comes amid higher crude oil costs and tight gasoline supplies. Nationwide, the highest average price for regular-grade gas was in the San Francisco Bay Area, at $6.20 per gallon, according to the survey, while the lowest average was in Tulsa, Oklahoma, at $3.92 per gallon. Separate data from the American Automobile Association (AAA) showed that, in the week between May 16 and May 23, the national average price for a gallon of regular gasoline increased by 11 cents to $4.60. AAA said in a statement that the current supply and demand dynamic, “combined with volatile crude prices, will likely continue to keep upward pressure on pump prices.” Andrew Gross, the national spokesman for AAA, told Fox News in a recent interview that he expects gasoline prices to climb further with Memorial Day weekend and the summer peak driving season fast approaching. Data from GasBuddy indicates that the national average price of gasoline in the United States on May 22 was at $4.57 per gallon, up 10.5 cents from a week ago, according to Patrick De Haan, head of petroleum analysis at GasBuddy. De Haan predicted in a recent Twitter post that U.S. gasoline prices this coming Memorial Day weekend could be not just higher than any other Memorial Day but a full $1 per gallon higher than the previous Memorial Day record of $3.99 per gallon set in 2014. Another dire gas price prediction came in a note from JPMorgan analysts, who on May 17 said prices could surge another 37 percent by August to an estimated national average of $6.20 per gallon. “Typically, refiners produce more gasoline ahead of the summer road-trip season, building up inventories,” said Natasha Kaneva, head of global commodities research at JPMorgan. Since mid-April, however, “gasoline inventories have fallen counter seasonally and today sit at the lowest seasonal levels since 2019,” she added. The U.S. Energy Information Administration (EIA) said in its most recent Short-Term Energy Outlook that global oil inventory levels in April in developed countries stood at 2.63 billion barrels, up marginally from February, when they fell to their lowest level since April 2014. EIA said that the Russia–Ukraine conflict has injected greater volatility into oil markets. “Sanctions on Russia and other independent corporate actions contributed to falling oil production in Russia and continue to create significant market uncertainties about the potential for further oil supply disruptions. These events occurred against a backdrop of low oil inventories and persistent upward oil price pressures,” EIA said. Oil prices surged above $130 per barrel in March over concerns of disrupted supplies from Russia, though they have since fallen. Brent crude futures rose by 1.32 cents cents to $113.82 a barrel on the morning of May 23, while the U.S. benchmark WTI crude advanced by 1.24 cents to $111.52. EIA predicts Brent will average $103 per barrel in the second half of 2022, before falling to $97 per barrel in 2023. “Because oil inventories are currently low, we expect downward oil price pressures will be limited and market conditions will exist for significant price volatility,” EIA noted. The Associated Press contributed to this report. Tom Ozimek ... Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.' Top Putin Adviser Warns of ‘Global Famine’ by the End of This Year3 Top Putin Adviser Warns of ‘Global Famine’ by the End of This Year A man pumps gas in Irvine, Calif., on April 1, 2022. (John Fredricks/The Epoch Times)
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