The Gasoline Indicator

Gas hits $3 a gallon

The price of gas has hit $3 a gallon in South Jersey on Sunday, according to AAA Mid-Atlantic, which recorded that price today. The average was up 1 cent from Friday.

The five-county Philadelphia region, in a state with higher gas taxes, reached the $3-a-gallon mark Nov. 17. The city and its four surrounding counties posted an average of $3.21 this morning, up 1 cent over Friday.

The national average was $3.10, unchanged over the weekend.

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Note the following quote is from April 2008:
Gas prices push closer to $3.50 a gallon
NEW YORK — Retail gas prices set new records Friday on their seemingly relentless march toward $3.50 a gallon, and diesel prices pushed further above $4 a gallon. Crude futures, meanwhile, surged to a new record of $117 a barrel.

The price of crude oil was pushed higher after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.

Back to $4/Gallon Gas?
The price of oil is poised for another run at $100 a barrel after a global economic rebound sent it surging 34% since May. That could push gasoline prices to $4 a gallon by summer in some parts of the country, experts say.

If there is one factor that could pull gasoline dependent suburban America back into recession it is higher gas prices.
I included the middle quote from 2008 as this is when the economy was rapidly taking on water and consumers were sinking fast.  We are now less than 50 cents a gallon away from that level.

One economist, who reference I could not track down, commented that once gas hits $3 the consumers slows discretionary spending and at $3.50, discretionary spending stops. 

This implies that at $4, consumers will start to look very hard at non-discretionary items.  That is a recipe for trouble.

While it is my view that we will see crude oil fall later this year, higher prices in the meantime could deal a body blow to the much touted recovery currently underway.


  1. HOLY S*IT!!!!!!!!!!!!!!!!


  2. Just in PW

    Italian authorities have confiscated $20 billion in counterfeit U.S. government bonds.

  3. That is correct Bill. Baltic Dry Index is tanking, and yet we get happy talk from Bloomberg and CNBC on the recovery.

    As to the counterfeit bonds, there was an example of this last year, if memory serves me correctly in either Italy or Switzerland. I will try to find the reference. These are not just small time hoods with a printing press in their basements, we are looking at some serious dollars. What did the counterfeiters intend to use this money for?

  4. Somehow reminded of the saying by Napolean Bonaparte "A man will fight harder for his interests than his rights".

    Adios my friend(s) this is probably my last visit to this website.

    All I can say is have an open mind towards the market rather than being biased and you will benefit more than you can imagine.

    Good Luck and Happy trading to All!



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