Summer Gas Prices Highest Since 2011 As Oil Hits 9-Month Highs

Tyler Durden's picture

It seems, as we noted earlier, that the machines running the crude oil pricing algos are running on a 24-hour delay but as ISIS pushes on towards Baghdad, takes Tikrit and images of burning refineries hit YouTube, crude oil prices have shot up. WTI Crude is back over $106, a level not seen since Sept 2013 and is the highs for this time of year since 2008's consumer-sapping levels. This recent strength has already leaked into gas prices (though there is more to come if the normal lag is anything to by) as regular gas prices have not been higher for this time of year since 2011. So there we have it - the excuse for Q2 GDP consumption weakness....


WTI is at 9-month highs (and highest for this time of year since 2008)...


And gas prices are highest since 2011 for this time of year...

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NoDebt's picture

"The commodities super-cycle is over."

Some dumbass "pro" last year.

fonzannoon's picture

He should have been more specific and just said PM supercycle.

mt paul's picture

gas 4 $ per gal

north of the alaskan range


buying silver for spot

 craigslist, great way to start the day

max2205's picture

And stagflation in 3 2 1

philipat's picture

But, but...I thought that The US was going to become the world's largest oil producer, bigger even that Saudi? That bubble didn't last long, did it??

ejmoosa's picture

There's no shortage of oil.

They are just demanding more paper dollars for it and getting it.


CrashisOptimistic's picture

Well, then, you should just refuse to buy it.  Get yourself long strings of people pulling ropes to pull the trucks into walmart's parking lot so they can fill the grocery shelves.

Flakmeister's picture

I'll give you a hint, excess reserves at the Fed ain't "printed" dollars....

What has happened for the first time ever is that cheap credit has not resulted in new supplies of "cheap" oil. It has barely resulted in new supplies of expensive oil... $3.5 trillion in CAPEX since 2005 has resulted in a decline of 1 mm bpd in the global legacy oil production system. For comparison, from ~1998 to 2005, a fraction of that ramped up production by ~4 mmpbd...

So there is defininately is a shortage of $40 dollar oil, no apparent shortage of $120 oil though, just a shortage of people that can afford it...

Whootie_who's picture

Obama should have built that kxl pipline from canada then who woud care about the M/E ?

Flakmeister's picture

And exactly what would that do?

Oracle 911's picture

It lasted long enough to pluck some suckers.

Cognitive Dissonance's picture

Remember when crude hit $140 just before the stock market crash of 08-09. I suspect oil will once again denote the mania top.

Millivanilli's picture

Well, it certainly will push inflation along!

NoDebt's picture

It wouldn't be the first time and I suspect not the last.

CrashisOptimistic's picture

It never seems to occur to anyone that in a world of abundance, price would not do this.

CrashisOptimistic's picture

Just to offer up a concept borne of scarcity -- you don't have to have high prices as a predecessor to empty tanks. You can have normal $105 prices for weeks and weeks and then suddenly discover lines at the gas station, because there is none to be had.

The US burns twice as much as it produces.  There is no law of the universe that says anyone has to send any to the US.  They might send it to China.

Think what life would look like in the US with shelves that don't get filled weekly by trucks.

fonzannoon's picture

The beauty of $105 oil for weeks and weeks (and throw in food prices and healthcare premiums and.....) is the middle class runs out of money before you run out of oil. At least that's one train of thought. 

CrashisOptimistic's picture

Oil never runs out.

It runs short. 

Within the peak oil folks there is a faction that embraces the concept of precisely what you said . . . the people run out of money before they run out of oil, so  . . . so . . . the thinking goes . . . somehow this means there won't be a disaster.  People can somehow still eat.  Shelves will still get filled.

That faction worships at the altar of gradualism.  They reject anything sudden -- like people acting for their own benefit and taking what they can rather than "sharing".

fonzannoon's picture

you don't get it, it's not sharing, it's a trade.. They give us the oil and we give them federal reserve notes. It's a fair trade as far as we are concerned. 

CrashisOptimistic's picture

Fastest growth in oil consumption in the world -- Saudi Arabia.  Iraq has Honda generators on street corners in summer to power air conditioners for that city block.  They don't run on coal.

These people have the audacity to burn their own oil.

There has arisen a lot of talk in Arab quarters about "keeping it for our grandchildren".  Warren Buffett is on record saying this about US oil -- it's precious beyond belief and even though it would cost me money, I think we should shut off our own production and burn everyone else's first.

Oil is everything.   The rest is hand waving.

lucyvp's picture

There's an app, I mean bomb for that

Citxmech's picture

Don't the Saudis subsidize their gas prices at a fixed cost of like $0.50/gal?  Of course such artificial prices encourage rampant use and pushes the export prices higher to cover the subsidy as it also lowers output.

Flakmeister's picture

The IEA estimates that globally annual fossil fuel subsidies amount to $500 billion dollars....

elegance's picture

They are using every trick there is to prolong life of the oil superfields. Ensuring that they will not decline gradually but collapse very suddenly.

Flakmeister's picture

For example, Cantarell....

thecoloredsky's picture

Strategic Oil Reserve dump in 3, 2, .....1

fonzannoon's picture

we have strategic middle class dumps now, not strategic oil reserve dumps.

ParkAveFlasher's picture

That reminds me, time for my strategic 11am dump in the middle stall.

NoWayJose's picture

Algos never sleep. They will temporarily turn their attack on oil at least until Yellen says untaper.

ifishivote's picture

The media in this country sucks! I'm paying $4 a gallon and not one f'ing mention of it on the news. If Bush was in office it would on the cover of every newspaper and news website in this country. Obama got elected by the media blaming Bush's oil buddies for $4 gas.


Energy and food prices are getting silly.

insanelysane's picture

My local newspaper printed a headline this week that the price remained steady.  Previously there would be a headline when it dropped a couple of pennies but not a peep when it goes up.  A few years ago it was Big Oil, Big Oil, Big Oil.

Flakmeister's picture

Just wait until the Bakken turns over....

Mind you, this is related to the realization that Iraq is about to go the way of Libya as far as exports go...

CYI, the "pundits" were wishcasting Iraq to be close to 12 million bpd by 2020 or so....

Citxmech's picture

What are they at now?  3.5mb/d?  

Did you see the report before the Mosul takeover that Iraqi oil interests were predicting that they'd more than double output this year to 8mb/d?  What a complete bullshit fabrication.

Flakmeister's picture

Yeah, basically...

Here is the latest data, the Iraqi output is noisy

Anyone want to bet that the modest rise since 2005 is over?

ParkAveFlasher's picture

+1000 for spreading the word "wishcasting".

orangegeek's picture

CME gas has been between 2.60 and 3.00 for almost a year


CME gas peaked in 2008 at 3.65


So why are pump prices at record highs?


Honestly folks, stop spending.  Put a fucking end to this bullshit. 

Flakmeister's picture

Where are pump prices at record highs?

Actually people *are* stopping to burn the stuff for joy rides with Chindia rushing in to buy that barrel...

OpTwoMistic's picture

This oil cannot be exported. Why is it climbing? Not logical.

jughead's picture

It's all my fault.  I have had week-long road-trip scheduled with my grandson for a year now...Murphy dictates that gas prices will go through the roof as soon as I get on the road tomorrow.  Good thing we're bringing bicycles too, we may need them to get home!

Spungo's picture

Thank god inflation is a good thing. I was starting to worry about lower transportation costs and increased commerce being a result thereof.

Lendo's picture

Hahahahaha!  Perfect.

Itchy and Scratchy's picture

Obviously the real problem is deflation! We need much higher prices! Go Oil Go! US$10/gal = Nirvana!

saltedGold's picture

Paid $4/gal yesterday when filling the car.  Noticed the local propane dealer was around $3.45 or so.  Up about 70 cents from the last time I drove by.  Just in time for BBQ season??



yogibear's picture

The traders can push gas to $6/gal this time? Yes we can!