Down is really Up

May 28, 2011

Yesterday, I put $20 worth of gas in my Jeep, this time at $4.29 a gallon for regular, a shocking $.15 drop in price in just more than two weeks, the last time I put fuel in the old Comanche (I don’t get out much).

All this in time for the infamous Memorial Day Weekend in which many, many US peoples take to the road, although this year the traveling might be light — although gas prices are now lower, they’re still $1.05 more than at this same time last year and the Energy Information Administration reports prices will be hiked 40 percent more during the upcoming summer.

Although the price at the pump appears to be decreasing, the price of crude oil is moving back upward again.
According to liveoilprices this morning: Brent crude oil futures for July 2011 delivery ended the week’s trading session at $114.98 a barrel on the ICE Futures Exchange yesterday evening, $2.55 higher than last week’s closing price of $112.43 a barrel.
Adding this caveat that those oil prices could be too conservative.
And WTI: US Light crude oil futures for July 2011 delivery ended the week’s trading session at $100.70 a barrel on the NYMEX, $0.88 higher than last week’s closing price of $99.82.

Crazy, and, crazy.

Although the portion of my monthly income going to Jeep fuel is way-dinky, that’s not the case for regular, ordinary peoples, who do have a life out there — some folks get out more, or have a fairly-decent commute to work (I live just a mile from my store) and these pump prices bite down hard on them.
And if they have kids at home, the situation has got to be even worse (mine are all grown, and for most of the time, are pretty self sufficient).
US family budgets are taking a big pop — nearly one dollar out of every $10 in a typical household budget now goes toward vehicle fuel, 40 percent higher than normal.

Households spent an average of $369 on gas last month.
In April 2009, they spent just $201.
Families now spend more filling up than they spend on cars, clothes or recreation.
Last year, they spent less on gasoline than each of those things.

“These increases are not something consumers can shrug off,” says James Hamilton, an economics professor at the University of California, San Diego, who studies gas prices. “It’s a key part of the family budget.”

The median household income in the U.S. before taxes is just below $50,000, or about $4,150 per month. The $369 that families spent last month on gas represented 8.9 percent of monthly household income, according to an analysis by Fred Rozell, retail pricing director at Oil Price Information Service.
Since 2000, the average is about 5.7 percent.
For the year, the figure is 7.9 percent.
Only twice before have Americans spent this much of their income on gas.
In 1981, after the last oil crisis, Americans spent 8.8 percent of household income on gas.
In July 2008, when oil price spiked, they spent 10.2 percent.
Average hourly earnings, meanwhile, have risen just 1.9 percent in the past year.
That’s only just enough to keep up with inflation.

Not getting ahead, but just staying even.
Despite those domesticated woes, fuel for the machinery of war is beyond horror, on all counts.
In order to get precious $400-a-gallon fuel into Afghanistan, one mega-dangerous route is via Pakistan.
Today, another attack on a NATO tanker there has resulted in at least 15 dead, mostly civilians, one a nine-year old kid.
From AFP: “Suddenly the fire erupted again and at least 15 people including five young boys who had been collecting oil in their buckets were burnt to death,” he said…They were collecting petrol to be sold later in the open market where one litre fetches around 100 rupees (about 1.2 dollars), he said.
The price of fuel is relative.


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