Monday, November 20, 2006

From the Duh files: Gas prices increase

Republicans think you are stupid. They thought if they managed to bring down the price of gas for a couple of months before the election that you would forget Iraq, Katrina, congressional crooks, Jack Abramoff, ... you know... all the stuff that really made it hard to run as a Republican in the last election.

The final proof is out. Starting in August the average price of gasoline fell dramatically, reaching a low with the Lundberg survey of over 5000 gas stations nationwide on November 3 (immediately prior to the midterm election) at $2.18. The same survey taken on November 17 shows an increase of a nickle... with the price of a gallon being $2.23.

There it is in black and white folks. It is as obvious as the monitor you are looking at right now to read this post. Prices fall to benefit Republicans, and as soon as they no longer need that boost in approval ratings the oil barons commence to stealing from you again. In fact I predict gas prices at record heights within a year and expect to hear Republicans saying it is because Democrats are in power!

If they are not careful the obvious villainy of these oil crooks will become too obvious to just ignore and Americans will elect people who will do something about it. Congress might just have the votes to do it now, but it will never pass the Presidents veto pen.

I especially like the rhetorical hoops Lundberg jumps through in order to not broach the obvious politically motivated timing of all this:
Lundberg said the halt in price declines showed "a mini-glut" of crude oil that began accumulating in August with the end of the summer driving season has been "soaked up," leading to "a normalization" of supply and demand.
Yes... no election time frame shenanigans, no oil barons trying to help their buddies... just a mini glut that has been soaked up. Do not waste your beautiful mind thinking about the various incongruities of all this. We experienced an anomaly and now things are back to normal. If making truly obscene profits taken directly from the wallets of every driver is normal that is.

Wouldn't it be embarrassing to be a oil baron toadie having to make up excuses for this? They may be able to pay the best speechwriters some big bucks to make the logic sound as good as it can sound, but no matter how much lipstick they put on this pig it still looks pretty ugly.

Well I'm just going to come right out and say to the many people who had to live around me (insufferable, honestly I feel your pain) during this past election... I told you so!

Just to play devil's advocate (wow, that expression really fits on this one) I will chime in.

I trade currency so I don't watch oil that closely, but I do hear the data as it is released, and I'm pretty market savy.

The upblip in gas price is more of a reflection of a surprise low number of distalates in the last round of data. Crude continues to drop (I just checked and oh my!) and this will eventually translate into cheaper gas in the medium term.

Oil touched $55 which is an important technical level so it could bounce right out of there... blah, blah, blah.

Long story short: sure, they can tweek it a little, but the gas drop into the election was a market event. Watch the price of crude for a preview of what is to come. If this $55 dollar level holds (or anything under $58 for that matter, expect another drop in gas prices in the next few weeks.

Also, watch gasoline futures: that tells you everything.
Wow... that was very technical and involved twin, I'm honestly impressed.

Here's my gut on this one though. Gas dropped precipitously for a few months before the election, and then rose immediately after. For whatever reason that is the case. If gas prices now fall, I am wrong. But the coincidince of what has already happened is striking, you have to give me that.
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