Summertime shocker: Gas could hit $3 a gallon

Chicago Sun-Times ^ | 1/16/04 | Lucio Guerrero

[Axenolith]

See my 51 and 100 posts. Oil companies are a good scapegoat, but it's the FED that's behind this coming rise. It's a lot more comfortable for politicians to have us bitching about oil companies than the Federal Reserve and monetary policy.

[the invisib1e hand]

the dollar is no lower, relative to a basket of currencies including what became the euro, than it was in 1990, 1992, and 1995.

if you want to extrapolate your premise, you could perhaps use as a guide crude prices during those times. in that period were times of very high economic growth (hence demand), and even the first real war in the mideast involving the US that I can recall.

Crude has traded at $40.00 per barrel before, with gasoline staying below $1.75 for the most part.

[Axenolith]

The dollars weakness was not what drove the price up in the past, it was uncertainty over supply. Now, as can be seen in the crude and dollar charts here at Moore Reseach, you can see that the general rise in Crude oil has pretty much corresponded to the unbridled printing of dollars that began initially as an injection of liquidity over the Y2K scare.

Now, we've heard plenty of discussion on the fact that the Russians and the ME countries are toying with pricing oil in Euro's. That idea, along with the Crude price, may see some weakening if the dollar rallies for a few weeks, but I wouldn't putting my money on that bet out more than 1-3 months. The dollar is probably going to see 1.40-1.50 to the Euro by late summer, unless there is intervention as is from Japan, and that will just make oil more expensive in each of those currencies.

OTOH, ~1/20th of an ounce of gold will probably buy a barrel of oil right into next century, barring wars & such...

[the invisib1e hand]

it was you who brought up the increase and related it to the dollar, not I. now you're flip floppin'. I get charts from Moore, too. Be sure to look at the Dollar Index.

G'day.

[Axenolith]

I was saying it wasn't related much then, but is now...

[the invisib1e hand]

I was saying it wasn't related much then, but is now...

that'd be signs of inflation, which I cannot argue with. I am certain that demand is up, as the economy has been stronger than many want to recognize for some time.

When the dollar hit lows in prior times, that was inflationary, as well. And coupling that with a mideast war (Desert Storm), we still had only $40 oil. The only difference was that it occured during a recession, when demand for crude was relatively low.

[KingNo155]

All those #'s and no mention of the taxes involved!