Obama’s Gas Pains.(PLB).More anomalous is Obama’s explanation this week that “gas prices are on the rise again because as the economy strengthens, global demand for oil increases.” It is true that global demand for oil is probably the primary driver of the price of oil right now (though surely a risk premium because of Iran is in the mix somewhere), but here in the U.S. demand for gasoline seems to be way off, as shown in the figure below which I plotted earlier this week for my Energy Fact of the Week squib over on American.com. The figure shows retail gasoline deliveries—the best proxy for consumption—falling off a cliff starting a few months ago—before prices began to creep back up. The fall in consumption ought to be holding down gasoline prices, all other things being equal (which they never are). Is the economy about to fall over the cliff along with this indicator? That’s what a lot of people are wondering.Read the full story here.
No comments:
Post a Comment