On Saturday, I put another $20 worth of gas in the old Jeep, the pump price still at $3.83 a gallon for regular here on California’s northern coast.
Meanwhile, with all the frantic activity amongst various warships in the Strait of Hormuz, the US average of gas at the pump was up 7 cents in the last week to $3.38 a gallon — 29 cents a gallon more than 2010.
Oil and politics really don’t mix, especially with the current GOP and its love of the wealthy (of self, really), but because ofÂ ‘problems‘ with Iran the price for normal, regular US peoples is expected to top $4 a gallon in 2012, maybe $5 a gallon in some places (California?) — anyway/anyhow it ain’t going no where, but up.
(Illustration found here).
On Friday, from liveoilprices: In London, Brent crude oil futures for February 2012 delivery was trading at $112.17 a barrel, 07.05 GMT today on the ICE Futures Exchange.
Also last Friday, WTI: US Light crude oil futures for February 2012 delivery was trading at $100.02 a barrel, 07.20 GMT this morning in electronic trading on the NYMEX.
Although US peoples shudder at the high pump prices, the cost right now is not at a ‘break even’ point for most American households — the pump don’t make or break the old budget, yet — but with the oil-producing countries, timing is everything.
From Fareed Zakaria at CNN:
I saw some striking numbers this week: Look at the “break-even” costs for the world’s top oil producers.
That is the minimum price at which these countries need to sell oil so that they can balance their budgets.
Russia now needs oil at $110 a barrel to manage its finances.
For Iraq, the number is $100.
Even Saudi Arabia now needs oil to trade around $80 a barrel just to balance its budgets.
The numbers are also high for Algeria, Qatar, and Oman.
Only a decade ago Saudi Arabia was able to balance its budget with oil prices averaging around $25 a barrel.
So now it is in these countries’ interest to keep oil prices high, which they do by curtailing supply in one way or the other.
This is perhaps the most lasting impact of the year of global protest: High oil prices.
So, the bottom line is an oil crash seems unlikely.
Even though the engines of global growth are sputtering, be prepared for a period of expensive commutes.
Maybe it’s time to trade in your Escalade for a Prius.
Most-likely too late to do much of anything except drive less.