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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Jlmadyson's picture

But the central bankers promised a McCovery?

YAY $150 oil!

Sudden Debt's picture

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

viahj's picture

they will only kick you in your McNugget

bigsteveee's picture

Get ready for the McFlurry

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!

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.

azzhatter's picture

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

HyperLazy's picture

Dammit and I sold my oil position in yesterdays spike.

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.

Dr. Engali's picture

We are well on our way to European prices.

Shizzmoney's picture

$6 gas by next February.

mrktwtch2's picture

long bikes and motorcylcles..short

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.


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. 

LeisureSmith's picture

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

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.

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.

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

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...

cnsteph's picture

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

sdmjake's picture

Don't worry, it's transitory.

DeFeralCat's picture

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

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.

Dr. Engali's picture

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

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.

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.

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...


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.''

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.

docj's picture

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


Hedgetard55's picture

Uncle Ben via proxies.

fijisailor's picture

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

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.

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?

Moe Howard's picture

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

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.

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.

q99x2's picture


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.

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.

pods's picture

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


Hype Alert's picture

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

Headbanger's picture



The Coming Surge In Initial Jobless Claims


Due to higher gas prices

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)

YesWeKahn's picture

Bernanke doesn't drive, he flies a hilicopter.

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. 

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.