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Be Careful What QE You Wish For #2467: Gas Prices Surging Again

Tyler Durden's picture




 

After a drop of more than 20% from late April to mid June in wholesale gasoline prices which was heralded as the great savior of a slowing global economy - all those implicit tax cuts... the hopes and dreams of the next great unsterilized money-printing has not only floated equity asset valuations to near multi-year highs but energy prices across Europe and the US are soaring once again. This 'transitory' 25% surge in wholesale gasoline prices in the US in the last two months - now back above $3/gallon implies (given the lag in transmission) that retail gas prices (which historically peak around July 4th) are set to rise notably above last year's summer peak - back up near record highs and eating into that ever so happy to spend consumer's pocketbook once again. Meanwhile, Europeans are seeing near-record highs in retail gas prices once again and Brent priced in EUR (which remember is what they 'care' about) is now back above 2008 highs and within a few euros of all-time record highs - up almost 30% since Mid-June. Deflationary? Recessionary?

US Crude, Wholesale Gasoline, and Retail Gas Prices are charging higher...

 

Brent priced in EUR is back up at 2008 highs and has surged 30% since mid-June - within EUR5 of all-time record highs...

 

and European retail 'petrol' prices  per liter are well above 2008 highs and back near record highs...

 

and compared to US per gallon prices are pushing higher...

 

Charts: Bloomberg

 

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Wed, 08/08/2012 - 11:09 | 2687682 Jlmadyson
Jlmadyson's picture

But the central bankers promised a McCovery?

YAY $150 oil!

Wed, 08/08/2012 - 12:46 | 2688043 urbanelf
urbanelf's picture

I'm lovin' it.

Wed, 08/08/2012 - 11:12 | 2687689 Winston Churchill
Winston Churchill's picture

We are McScrewed.

Wed, 08/08/2012 - 12:16 | 2687942 Sudden Debt
Sudden Debt's picture

I'm in a hurry, I'll just take the McBlowjob

Wed, 08/08/2012 - 13:24 | 2688155 viahj
viahj's picture

they will only kick you in your McNugget

Wed, 08/08/2012 - 11:15 | 2687705 bigsteveee
bigsteveee's picture

Get ready for the McFlurry

Wed, 08/08/2012 - 11:15 | 2687706 Jason T
Jason T's picture

Demand is down 4% in the US for gasoline from last year.. and the price was the same as a year ago.  ... we can't afford the gas anymore!

Wed, 08/08/2012 - 11:44 | 2687840 Meesohaawnee
Meesohaawnee's picture

really. if you havent figured out they dont care time to do some homework. ive long since understood no politician etc gives a rats flyin f$%k about any common middle class person. You need to stop thinking in that manner.

Wed, 08/08/2012 - 11:58 | 2687884 azzhatter
azzhatter's picture

don't have to drive to work, Obammy will pay you to stay home. Go long Cheetos

Wed, 08/08/2012 - 11:16 | 2687707 HyperLazy
HyperLazy's picture

Dammit and I sold my oil position in yesterdays spike.

Wed, 08/08/2012 - 14:07 | 2688355 Arnold Ziffel
Arnold Ziffel's picture

more suburbs to slums as gas prices hit outlying zero-down folks the hardest:

 

Is your suburb the next slum? Once the symbol of the American dream, many suburban communities could be on their way to becoming tomorrow’s slums.

 

 

http://realestate.msn.com/article.aspx?cp-documentid=21179977

Wed, 08/08/2012 - 11:17 | 2687711 Dr. Engali
Dr. Engali's picture

We are well on our way to European prices.

Wed, 08/08/2012 - 11:17 | 2687712 Shizzmoney
Shizzmoney's picture

$6 gas by next February.

Wed, 08/08/2012 - 11:17 | 2687715 mrktwtch2
mrktwtch2's picture

long bikes and motorcylcles..short suvs..lol

Wed, 08/08/2012 - 11:18 | 2687718 Not Too Important
Not Too Important's picture

Several refinery fires, plenty of refinery 'maintenance' shutdowns, just as profits start to dip.

It's the profits at the pump that pay for the increasing costs of extraction. Well, the bonuses and shareholder dividends, too. My bad.

 

Wed, 08/08/2012 - 11:19 | 2687720 SheepDog-One
SheepDog-One's picture

So heading into election season with gas over $4....I can see now why the police have placed record orders for riot gear. 

Wed, 08/08/2012 - 11:26 | 2687744 LeisureSmith
LeisureSmith's picture

When LRAD and ADS become household names, shit will fly.

Wed, 08/08/2012 - 12:44 | 2688031 Shizzmoney
Shizzmoney's picture

Actually, anything under $5 - the American people have a tolerance for.  CA/NV drivers were putting up with $4.45 gas for a while, before prices collapsed. 

BUT once we get over $5....the American people are going to start to freak out because we've all come to the conclusion that a buck isn't what it used to be.  But a Fin? That's going to "pin some ears" because the public will rightly figure out other commodities going up, will be next.

Wed, 08/08/2012 - 11:19 | 2687723 yrad
yrad's picture

I paid $5.34 for a gallon of milk last night...

Maybe my family should start drinking gasoline, its a little cheaper.

Wed, 08/08/2012 - 11:21 | 2687728 Dr. Engali
Dr. Engali's picture

Where in the hell are you paying $5.34 a gallon? I paid $1.69 a gallon last night. The highest I'vepaid in the past year is $1.99

Wed, 08/08/2012 - 11:26 | 2687741 sdmjake
sdmjake's picture

If you buy the stuff without rBST & rBGH its more expensive. Runs $2-3/half gallon.

If you are cool with the Monsanto version its much cheaper...

Thu, 08/09/2012 - 01:33 | 2690141 cnsteph
cnsteph's picture

In north Virginia I paid $6.39 a gallon two days ago.  Shit's getting expensive here.

Wed, 08/08/2012 - 11:22 | 2687729 sdmjake
sdmjake's picture

Don't worry, it's transitory.

Wed, 08/08/2012 - 11:27 | 2687746 DeFeralCat
DeFeralCat's picture

Buy a cow! Just don't feed it corn.

Wed, 08/08/2012 - 11:28 | 2687748 yrad
yrad's picture

Gas station "convenience" store in Texas. And, I havent seen a gallon of milk for $1.69 since I was 12 years old. You must live on a Kansas dairy farm.

Wed, 08/08/2012 - 11:40 | 2687774 Dr. Engali
Dr. Engali's picture

Close ..Indiana. But I don't live on a farm, and those prices aren't from a convenience store .

Wed, 08/08/2012 - 11:41 | 2687826 PiratePawpaw
PiratePawpaw's picture

Gas and Milk are both about $3.69/gal in Rural N Tx.

Which coincidentally is what I figure fair value for a silver dime to be.

Wed, 08/08/2012 - 11:34 | 2687797 1100-TACTICAL-12
1100-TACTICAL-12's picture

$5.20 here in the Heart of FEMA Region 6. Thats organic or @ least that's what the label reads.

Wed, 08/08/2012 - 12:41 | 2688021 sdmjake
sdmjake's picture

I'm here in Fema6 too. See the same prices.

 Good tool for folks to update on their region and see what the REAL cost of living is...  http://www.expatistan.com/cost-of-living/index

 

Wed, 08/08/2012 - 14:35 | 2688455 RSloane
RSloane's picture

White shoots!

Wed, 08/08/2012 - 11:21 | 2687727 SDRII
SDRII's picture

India more punitive measures to retard gold demand:

 

The money line:

The government has said it would prefer savings to be invested in ``more productive assets'' that would help boost the growth rate. Earlier, the Minister had said, ``The time is ripe to motivate our educated upper middle-class to climb from savings mode to wealth generation mode.''

http://www.mineweb.co.za/mineweb/view/mineweb/en/page72068?oid=156649&sn...

Wed, 08/08/2012 - 11:23 | 2687731 SmoothCoolSmoke
SmoothCoolSmoke's picture

The question becomes, which affects the election more?  SP 1120 or $4+ gas.  I'd say $4 gas.  But what do I know.

Wed, 08/08/2012 - 11:24 | 2687733 docj
docj's picture

And as if on cue, someone hit the "BUY EVERYTHING!!!!!!" button at around 11:05.

#BrokenMarkets

Wed, 08/08/2012 - 11:30 | 2687770 Hedgetard55
Hedgetard55's picture

Uncle Ben via proxies.

Wed, 08/08/2012 - 11:27 | 2687750 fijisailor
fijisailor's picture

Don't worry.  There will be no deflation.  It's all under control

Wed, 08/08/2012 - 11:31 | 2687778 Dareconomics
Dareconomics's picture

Once the stock and commodities markets get the idea that more cheap money is coming, they rise. This is excellent news people with large stock portfolios or oil companies, but it is bad news for everyone else.
Rising energy prices take a bite out of consumers' wallets decreasing consumption in other goods.

High stock prices also hurt most Americans. How can this be? Well, if you need to invest your present earnings to save for retirement, then the high prices that you are paying today will eat into your returns tomorrow.

The markets are a zero-sum game. Fed money-printing helps keep the rich and powerful, rich and powerful, at the expense of everyone else.

http://dareconomics.wordpress.com/

Wed, 08/08/2012 - 11:47 | 2687848 Meesohaawnee
Meesohaawnee's picture

but but but i dont undertand.. CNBC keeps calling it stimulative? what does it stimulate other than Becky Quicks loins around uncle warren?

Wed, 08/08/2012 - 12:15 | 2687940 Moe Howard
Moe Howard's picture

Becky Quick falls backward with legs akimbo at the mention of Uncle Warren's name.

Wed, 08/08/2012 - 12:46 | 2688042 Shizzmoney
Shizzmoney's picture

I used to fawn over Becky unti lI came on here and ya'll keep on with the Uncle Warren jokes.  Now all I can think about when I envision Becky naked is her fawning over Warren's flacid penis. 

It's all good.  Lauren Lyster is hotter, anyways.

Wed, 08/08/2012 - 11:32 | 2687782 DeFeralCat
DeFeralCat's picture

A week ago if Bernake printed, he would help Obama win the election. Now, if he prints, he costs Obama the election. His best move may be to pull a Jamie Dimon and print but tell people it is too "burdensome" to tell people actually what happened.

Wed, 08/08/2012 - 11:32 | 2687787 q99x2
q99x2's picture

McMotorcycle.

Wed, 08/08/2012 - 11:38 | 2687817 Meesohaawnee
Meesohaawnee's picture

well surely its BULLISH !! look at the tape..higher gas prices equal higher multiples cause that means more people working and spending. Come on. You didnt think fundamentals mattered?  were only allowed 1 hour of red a week.

Wed, 08/08/2012 - 11:41 | 2687823 Hype Alert
Hype Alert's picture

Yes, you see gas price increases are because of refinery fires and food price increases are because of the drought.  QE has nothing to do with inflation.

Wed, 08/08/2012 - 11:49 | 2687852 pods
pods's picture

Could you point me to the rule which specifies that investment banks cannot speculate on the foodstuffs of the nation?

Thanks!

Wed, 08/08/2012 - 12:09 | 2687916 Hype Alert
Hype Alert's picture

It was a sarcastic comment.  I guess some took it seriously.

Wed, 08/08/2012 - 11:44 | 2687841 Headbanger
Headbanger's picture

Tyler:

 

The Coming Surge In Initial Jobless Claims

 

Due to higher gas prices

 

http://www.businessinsider.com/the-coming-surge-in-initial-jobless-claim...

Wed, 08/08/2012 - 11:45 | 2687842 rwe2late
rwe2late's picture

Any current oil shortage is MOSTLY caused by

 the US destruction of Iraq, and blockade of Iran

(essentially done to maintain the petrodollar racket)

Wed, 08/08/2012 - 11:46 | 2687846 YesWeKahn
YesWeKahn's picture

Bernanke doesn't drive, he flies a hilicopter.

Wed, 08/08/2012 - 11:50 | 2687858 Haager
Haager's picture

So Obama wishes wardrums, high SPY, low gas/oil prices...

- I think he must stick with 2 of the 3, he can't have them all. 

Wed, 08/08/2012 - 12:16 | 2687944 sschu
sschu's picture

This is Bennie's real problem, the price of WTI and Brent and their effect on the economy are not compatible with QE/Twist/monetization/ZIRP.  Hence any benefit to be gained by juicing the economy by distributing Bennie bucks is soon lost when the price of this key commodity increases.  

The suppliers of oil know they are being screwed by getting a depreciating dollar for their product and the gamblers on Wall Street take the free money and bet on commodity futures.  

Nice job Bennie etal, you are completely hamstrung with no options.  Raise rates?  Bankrupt the Fed.  Stop printing money?  Crash the market.  Print more FRNs?  Commodity prices kill any benefit.  

The best the economy can hope for is more of the same unless the direction is changed.

How do we get a new Fed Chair and Treasury Secretary?  Who is going to want the job anyway.

sschu 

Wed, 08/08/2012 - 12:22 | 2687958 Jumbotron
Jumbotron's picture

Inflation.....which will lead to deflation....which will lead to recession....which will lead to QE.....will will lead to Hyperinflation....which will lead to starvation.

Got it.

Wed, 08/08/2012 - 12:22 | 2687959 Hype Alert
Hype Alert's picture

Oil and gas are the administration's whipping boy, yet without them the economy would certainly freeze up.  I would think with a strong dollar and demand down, prices should be down, but give The Bernank credit as he's been fighting deflation and it looks like he's winning.

Wed, 08/08/2012 - 12:24 | 2687962 Moe Howard
Moe Howard's picture

USA average price for 1 gallon of regular gasoline in fiat Federal Reserve Notes: $3.65

USA price for 1 90% silver pre-1964 dime: $2.08

USA average price for 1 gallon of regular gasoline in real currency [USA 90% silver coins]: aprrox 17 cents.

Yes prices have gone up recently, it was 15 cents. Ha ha.

30 cents a gallon back when those coins were in circulation.

Wed, 08/08/2012 - 13:07 | 2688110 Lost Wages
Lost Wages's picture

So in terms of silver, gas is $3.65 today, but was $6.24 in 1964? Congratulations to the Federal Reserve for cutting gas prices in half over the last 50 years!

Wed, 08/08/2012 - 17:13 | 2689049 GMan_
GMan_'s picture

Guess I'm gonna have to start telling my wife not to drive the Lamborghini and start driving the more efficient Hummer... sigh....

 

Who knows of a good Prius dealership? hahah

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