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2011 and the Gas Price Outlook

 
J-Rico
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01/14/2011 03:30 PM
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2011 and the Gas Price Outlook
So I figured I'd wait a week or two before I posted this.
I've had some good debates about the price of gas over the last few weeks and the FIRST point brought to me about gas prices NOT going up was:

- It is the holidays, it will go down again.

Well, Christmas and New Year's are over. It's the 14th of January and pretty much, it still went up.

NJ's average went up right after the New Year, right over $3.00:

[link to njtoday.net]

Now, I'm paying 2.93.
Last year at about this point, I was paying about 2.39.
That's pretty much a .50 cent increase in the course of the year, but what's interesting about that is the increase was made not DURING the year, but during the last HALF of the year. It wasn't until AFTER Labor Day that the price started spiking up.

But wasn't the usual trend that gas prices spike up during the summer schedule... anytime between Memorial Day and Labor Day... go down, and then back up for Christmas Holidays?

If it was, that trend is over.

Right after Labor Day, my gas price was at $2.49, so theoritically speaking, at Sept 5th, it had gone up a whole 10 cents over the course of the first 8 months. By year's end, it had gone up to $2.89 in my area. Using my area as a sample size, it had gone up 10 cents PER MONTH within the LAST four months of the year. Christmas is over and it still has jump 2 cents per week in my area. It was steady at $2.89 for the first month of January and in THIS last week it went from 2.89 to 2.93. Now there are still 15 days left in January which means that it can still continue the trend upward to 10 cents per month. Now realistically, I don't expect the trend to mathematically follow a perfect plateau of 10 cents per month. Maybe it'll stall at 6 or 8... but given the last four months, I think it'll continue to 10 cents per month. Now here's the scary month given my scenario. Let's say that this trend of 10 cents per month continues, despite what you think of gas prices and seasonality...

It would suggest that 10 cents per month would look like this in a perfect "control" environment for MY area:

February 5th: 2.99
March 5th: 3.09
April 5th: 3.19
May 5th: 3.29
June 5th: 3.39
July 5th: 3.49
August 5th: 3.59
September 5th: 3.69
October 5th: 3.79
November 5th: 3.89
December 5th: 3.99

NOW, my area is slightly lower than the New Jersey average. At the time the above article came out, the average was 3.00 when MY gas was at 2.89 so we'll declare a deviation of about 10 cents between MY gas station and NJ.

Now, we also know that NJ pays a little less than the national average for gasoline. And it that holds true, a LOT of states like Alaska, will be seeing that $4 earlier than December. Remember, my scenario holds true ONLY if the price goes up 10 cents a month. I'm not even taking into account the fact that summer demand will skew my projection... so in other words, YES, I know my calculations are flawed and I am admitting that from the get-go, but I'd rather be prepared with a control group of my own based on a few months of analysis rather than try to project including variable measures.

Back in September 2010, when the national average was $2.74, NJ's was $2.50 so that's a .24 cent deviation. Essentially, MY deviation from the national average is about THIRTY cents.

[link to www.nj.com]


Folks, this ISN'T good news. The only trend downward in gas in the last 3 year cycle since the 2008 implosion was right after the summer of 2008 when we went to the highest prices seen EVER to the lowest prices we'll never see again. I'm basically making this post as a means for discussion towards the trend.

Let me know whether I am jumping to conclusions based on a small sample size of prices since 2008 or if the trend looks just about right. I already know I am NOT accounting for deviations in my statistical and yet simplistic model of .10 per month, but the last 4 months of 2010 show me no other reason to believe that it would go DOWN at all.

If by September 5th, I'm paying $3.69... that means that the national average will ALREADY be close to $3.99... and there's that dreaded $4.

I HAVE said in the past that gas would very likely hit $4 in the summer, and when I said that, I meant the national average. And so far, it seems I "might" be correct. The bottom line is implicit though, what it means is that unlike 2008, this time we're already screwed instead of "about to get screwed". This time food inflation is hitting us hard. Oil and gas prices aren't going to help. A solution isn't "take a care pool" or "ride a bike". This will affect us EVERYWHERE, from the food we buy, to the gas we use in our cars, to the plastic we need, etc...

Looking forward to some discussion about this.

Last Edited by J-Rico on 01/20/2011 10:34 AM
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Native-Alien

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01/14/2011 03:46 PM
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Re: 2011 and the Gas Price Outlook
I've noticed a LOT of prices have increased since New Years, mainly food items.

For example, I shop at a local Kroger, and two weeks ago I was paying about $2.99 for a tub of thinly sliced lunch meats.

I bought the same stuff a few days ago, and now it's $4.49. That's a HUGE increase virtually overnight.

Almost all produce such as grapes, most peppers, strawberries and others are twice what they cost just weeks ago. Hell, just ONE green, yellow, or red bell pepper is now $2.49 EACH!

WTF is this shit?
J-Rico  (OP)

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01/14/2011 03:52 PM
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Re: 2011 and the Gas Price Outlook
Inflation.
OPEC.
QE2.

So many reasons why it's happening.

At Aldi, I was paying $1.09 in December for a dozen of eggs.
Fast forward to January... $1.55 per dozen.

So we're contending with a steady and so far consistent increase in gas, plus the exponential increase in food and yet, those who get a check (whether employed or unemployed) still are making the same money per month.

Our disposable income is getting smaller and ridiculously quick.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Stu

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01/14/2011 03:57 PM
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Re: 2011 and the Gas Price Outlook
look at the WTI benchmark price (U.S. price) at 92

its way below ALL the world benchmarks


Tapis is at 104+ and Brent is at 98+

this is due to US demand dropping but world demand increasing

2010 saw world demand increase by 2.5 million bbls a day


so WTI will have to catch up to rest as it was working off the stored oil in floating tankers and is now dried up



guaranteed price increases ahead and this is only Jan...typically a tepid time of year for demand


I see 3.50-4.00 a gal easy this summer
_____________________________________
Even the structure of the atom has been found by the mind. Therefore the mind is subtler than the atom. That which is behind the mind, namely the individual soul, is subtler than the mind.

-Ramana
Parafukeet

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01/14/2011 04:05 PM
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:)
Nothing could be more relaxing than giant rodents soaking in a hot tub NOTHING
J-Rico  (OP)

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01/14/2011 04:05 PM
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Re: 2011 and the Gas Price Outlook
guaranteed price increases ahead and this is only Jan...typically a tepid time of year for demand


I see 3.50-4.00 a gal easy this summer
 Quoting: Stu



This is what scares me. January IS a tepid time of the year for demand but nothing I am seeing is indicating that the trend is to go downwards, instead upwards and steadily.

$3.50 is a definite for most states in the U.S. from what I can see... and as soon as May, barring any oil-centric events that could spike the demand that much further up while affecting supply negatively.

I'd say for certain, I see $3.50 at the LEAST for June, possibly as soon as May.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Anonymous Coward
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01/14/2011 04:11 PM
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Re: 2011 and the Gas Price Outlook
Lindsey Williams right again!

5a
Stu

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01/14/2011 04:11 PM
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Re: 2011 and the Gas Price Outlook
guaranteed price increases ahead and this is only Jan...typically a tepid time of year for demand


I see 3.50-4.00 a gal easy this summer



This is what scares me. January IS a tepid time of the year for demand but nothing I am seeing is indicating that the trend is to go downwards, instead upwards and steadily.

$3.50 is a definite for most states in the U.S. from what I can see... and as soon as May, barring any oil-centric events that could spike the demand that much further up while affecting supply negatively.

I'd say for certain, I see $3.50 at the LEAST for June, possibly as soon as May.
 Quoting: J-Rico



dont believe the media...its not speculation this time (though a depreciating dollar is part of the problem)

Ive been studying peak cheap oil for years and we are seeing production declines of 5-7 % a year in CONVENTIONAL oil...the world will never again exceed the 73+ milllion barrels/day rate seen in 2005

in its place, substitutions as ethanol, biofuels, shale oil, oil sands, ultra-deep water drilling are trying to make up difference but it wont be enough


in return for the lost productivity of cheap oil...the world is manufacturing cheap credit instead of real growth produced from the easy leverage of cheap oil


this will end in tears


also the Saudis are lying about their reserves



Also think about this one thing :


There is absolutely no difference between no gas available at the fuel pump and UNAFFORDABLE gas at the fuel pump

Last Edited by Stu on 01/14/2011 04:13 PM
_____________________________________
Even the structure of the atom has been found by the mind. Therefore the mind is subtler than the atom. That which is behind the mind, namely the individual soul, is subtler than the mind.

-Ramana
J-Rico  (OP)

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01/14/2011 04:19 PM
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Re: 2011 and the Gas Price Outlook
Also think about this one thing :


There is absolutely no difference between no gas available at the fuel pump and UNAFFORDABLE gas at the fuel pump
 Quoting: Stu



Your whole post is definitely food for though, specially that last part.

Things that definitely need to be absorbed and internalized.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Anonymous Coward
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01/14/2011 04:22 PM
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Re: 2011 and the Gas Price Outlook
$4 for eggs
$5 for butter
SaltWaterTaffy

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01/14/2011 04:25 PM
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Re: 2011 and the Gas Price Outlook
$4 for eggs
$5 for butter
 Quoting: Anonymous Coward 911383


bump for real doom
:SWT name:

When the shit hits the fan and the end is quite nigh,
will you cry out to heaven? Will you lay down and die?

Not me, my dear ones. This is my sacred life. To no one or no thing I'll surrender.

For how does one know where when dead he will go, or if sweet mother Earth she'll remember?
Parafukeet

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01/14/2011 04:35 PM
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Re: 2011 and the Gas Price Outlook
Bikes are dangerous to ride most areas.
Not safe enough to avoid costs.

Last Edited by Parafukeet on 01/14/2011 04:38 PM
Nothing could be more relaxing than giant rodents soaking in a hot tub NOTHING
Anonymous Coward
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01/14/2011 04:36 PM
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Re: 2011 and the Gas Price Outlook
They have been artificially holding down the price of oil for a while now. Unfortunately for us in the US, back in Oct. or Nov. in a collective F. U. to the USA, OPEC named Iran president.

I said when it happened that after all the poking and poking at Iran was about to come back and bite us in the ass. OPEC now says "the world can afford $100 per barrel oil".

Iran has no reason to "reign things in" and will let the price escalate. I'm going to go with LW's prediction of $4-5/gal gas in the US by summer.

It should be enough to push what is left of the economy over the edge. I know that every 50 cent increase in gas prices pushes what I pay for gas per month up about $60-70 total. A rise of $1-2 per gallon will be enough to push a lot of people just barely hanging on right over the edge. It's not just the cost of the gas, but everything else goes up too as delivery costs rise.
Stu

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01/14/2011 04:46 PM
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Re: 2011 and the Gas Price Outlook
every one cent rise in the price of gasoline takes away
$ 600 million dollars in discretionary spending by consumers
_____________________________________
Even the structure of the atom has been found by the mind. Therefore the mind is subtler than the atom. That which is behind the mind, namely the individual soul, is subtler than the mind.

-Ramana
J-Rico  (OP)

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01/14/2011 05:06 PM
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It should be enough to push what is left of the economy over the edge. I know that every 50 cent increase in gas prices pushes what I pay for gas per month up about $60-70 total. A rise of $1-2 per gallon will be enough to push a lot of people just barely hanging on right over the edge. It's not just the cost of the gas, but everything else goes up too as delivery costs rise.
 Quoting: Anonymous Coward 1115596


Good point, I need to calculate my monthly increase as well.

It's not going down either, so might as well say "Goodbye" to the extra income if you are living paycheck to paycheck.

The time for living beneath your means is definitely here, and been here for a while, and with all the info Stu has provided in addition as well... well, it's damn near frightening.

If as guzzling vehicles suffered in sales back in 2008, I wonder what'll happen this time around.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
J-Rico  (OP)

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01/14/2011 05:19 PM
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Re: 2011 and the Gas Price Outlook
Note to self: Pinning this thread for myself in order to document the process throughout the year and see how wrong or right I am.

I wish I were wrong and it'd go downward, but it's not going to happen.



And upon reading another thread, I found this gem by Dr. House... definitely a MUST read for many since it's an accurate depiction of what we might be looking at circa last quarter of 2012 and beyond, when gas will most likely be at around $5... so 2013 is looking well... bleak):



It is estimated that at or around $6.00 a gallon the structure of American Civilization collapses.

This assumes that the paycheck does not keep pace with the increase in fuel prices.

The USA relies heavily on its highway system and on mass transportation of goods via ship and truck. At one time we had a massive cargo train system, however through the decades it has slowly been dismantled.

Forget passenger trains in the USA, they nearly do not exist at all.

Nearly 90% of US citizens now live in urban and suburban settings. Suburban areas are designed with the private car in mind. Usually 1-5 miles to your nearest store. Other services being in a ten mile radius. A quick few minute drive at 35 MPH - a long day long event if you are walking.

The price of everything ties into the price of petroleum. It takes petroleum to produce and ship everything. A lot of the stuff you use is directly tied into petroleum. Many drugs have plastics and petroleum in them. Nearly every form of medical application has plastic in it (scalpels, suture kits, even bandages).

Food relies heavily on petroleum. All of those pesticides, herbicides and fertilizers are produced directly from oil. To plant seeds, cultivate, harvest requires oil to run the tractor. To process the food (can it) requires oil (to run the plant) oil (to line the cans) oil (to ship those cans out to stores) Oil (to get the workers to work to can, ship and put those cans on the shelf).

Few people can manage to maintain their commute at $4.00 per gallon and pay bills and keep food on the table. Around $5.00 a gallon it becomes financially impossible for people to go to work (it starts costing more to get to work than what they can budget for fuel costs).

Around $6.00 a gallon it becomes impossible for people to make enough to offset the fuel costs. Mind over 50% of the US population commute over 25 miles one way to their job.

Stores will start closing around $6.00 a gallon. Specialty stores that deal in stuff that is not needed, expensive clothing shoe stores, will close their doors.

A shortage of food will take place like none we have seen for the past 100 years as crops wither in the fields without enough workers to harvest and not enough machines to actually do the work. More food is lost sitting in boxes on the farm with no cheap way to get it to the canners.

Riots and looting will break out in the inner city where it costs substantially more to get food due to shipping costs.

Around $7.00 per gallon the USA will most likely be under a state of curfew as inner cities are having a bit of 'civil unrest' which is now bleeding over into the surrounding suburban areas.

Over half of the medications people use to stay alive are petroleum based, meaning they require petroleum in part of the material that makes up the drug (outside of energy used to produce and ship the drug). The cost of these medications will sky-rocket. If you are not rich, you die.

While people worry about the coming food riots, few understand that there will be a drug riot as heart medication, stroke medication, antibiotics, antivirals, blood thinners, thousands of other medications become too expensive to where your Health Insurance company will flat refuse to pay out.

Add to that diabetic supplies.


Around this time your typical farm crop yield will suddenly drop to about 10%. Why? Because we have used chemical fertilizers for so long that hardly any crop land is tenable. Chemical fertilizers is to soil what meth is to a person. Heavily addictive and able to strip the natural defenses of the soil down to nearly 0. It will take at least - AT LEAST - a decade before soils become naturally fertile again, assuming that the right weeds grow and die and rot and re-stabilize the soils.

Pests and disease will most likely wipe out what is left of the crop as many of the seeds used do not have the right immunities to the plethora of diseases and pests that are kept at bay with chemicals we spray on our crops. There is a rebound effect of nearly 5 years before pests and disease drops to natural levels in soils. ANYTHING we plant as the way of food will be attacked and killed.

Long before the price of gasoline reaches $10.00 a gallon the society we call the USA will collapse.

Its addiction to oil is its own doom.
 Quoting: Dr. House

Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
gotbeer

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01/14/2011 06:56 PM
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Re: 2011 and the Gas Price Outlook
watch this site also [link to www.thegasgame.com]
J-Rico  (OP)

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01/14/2011 07:00 PM
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Re: 2011 and the Gas Price Outlook
gotbeer, awesome link.
Thank you very much.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
J-Rico  (OP)

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01/18/2011 08:39 AM
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Re: 2011 and the Gas Price Outlook
Gas price going up in a few spots:

Michigan: [link to wtvbam.com]

New Mexico predicting 3.50 to 4.00 by the end of the year: [link to wtvbam.com]

Sacramento: [link to www.modbee.com]

Of course, it's going up all over.

Seems the national average as of today is 3.07.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
J-Rico  (OP)

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01/20/2011 10:10 AM
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Re: 2011 and the Gas Price Outlook
It just went up another .02 cents here in my area.

The tally for this month: .06 total
Day of the month: 20

Projected tally: .10
Days in the month: 31

Looks like it's gonna hit the .10 mark easily at this point. Still monitoring and evaluating news stories as it comes, but so far, the trend continues.

What happened to gas going down AFTER the holidays?
I still ask.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
J-Rico  (OP)

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01/29/2011 09:52 AM
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Re: 2011 and the Gas Price Outlook
I have to admit, the gas went down .02 cents yesterday.
Had forgotten to update this thread.

But I don't think this is a trend that will keep going on, specially given the current world events.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
cRoSS FiRe

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01/29/2011 09:54 AM
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Re: 2011 and the Gas Price Outlook
J, do you want to change your prediction from the 2011 thread?

I'm staying with $5, and I hope I am wrong. This ain't lookin so good.
"Nothing is as far away as one minute ago." --Jim Bishop

:gameizovar:

It's DO:OM o'clock. WAKE UP!
J-Rico  (OP)

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01/29/2011 09:58 AM
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Re: 2011 and the Gas Price Outlook
J, do you want to change your prediction from the 2011 thread?

I'm staying with $5, and I hope I am wrong. This ain't lookin so good.
 Quoting: cRoSS FiRe



As of right now, my outlook is for my specific area.
I know it's flawed that way, but it's the only trend that I can specifically look at.

Realistically speaking based on past months' numbers, if all things hold constant, I see the national average close to $4.50 by year's end.

Of course, we know things will probably alter from that. It could VERY well be $5.00 and I REALLY want to say that's the case, but that would be breaking my own statistical model.

I'm at a crossroads between following the factual analysis for my area and what I would love to project.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Anonymous Coward
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01/29/2011 11:15 AM
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Re: 2011 and the Gas Price Outlook
Even if you will pay 4 bucks per gallon you still pay roughly half of what we do, so my compassion is limited.

Whats your mpg?
Anonymous Coward
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01/29/2011 11:35 AM
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hate to tell ya j-rico but the price aint coming down any time soon, you will see 5.00gal for gas before you will 2.00gal.
J-Rico  (OP)

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01/29/2011 12:07 PM
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Re: 2011 and the Gas Price Outlook
Even if you will pay 4 bucks per gallon you still pay roughly half of what we do, so my compassion is limited.

Whats your mpg?
 Quoting: Anonymous Coward 1247659


Most of that is taxation though, at least for places like Britain.

The problem is that if the world reserve currency that is used for gas exchange is suddenly in trouble, it spells trouble for the rest of the world.

Your compassion needs to be of a broader spectrum.

Don't think of it as "Americans are screwed".
If the world reserve currency is screwed, what happens to the world?
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
J-Rico  (OP)

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01/29/2011 12:07 PM
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hate to tell ya j-rico but the price aint coming down any time soon, you will see 5.00gal for gas before you will 2.00gal.
 Quoting: Anonymous Coward 1232120


Oh I know it'll never come down to 2.00 gal.
What we saw in the second half of 2008 is NEVER going to happen again.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Bummy

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01/29/2011 12:13 PM
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DOOM!
Bummy
J-Rico  (OP)

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02/02/2011 10:03 AM
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Re: 2011 and the Gas Price Outlook
Gas just went up .04 cents.
So far, the monthly tally is up to .08.

My monthly numbers are up on the 5th. It's the 2nd, so I'm not so far off.

What I will do on the 5th is begin to include the national average as well as the Jersey average and compare those numbers to my numbers.

So far, almost par for the course.
I don't think it'll go the extra .02 by the 5th in order to maintain the perfect course of .10 a month, but then again, I am going off of the 5th of the month, and not the first, so that's straying data a little.
Had I gone by calendar month, January only saw about an increase of .04 cents, but... that's not the way I'm conducting this... unfortunately.


So far, January 05 to Feb 02: 3 increases of .02 cents, 1 decrease of .02 cents and 1 increase of .04 cents totally for .08


Will continue to monitor.
Everyone dies, but not everyone lives.

:moranrico::Rico::moranrico:
Anonymous Coward
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05/13/2011 08:59 PM
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Re: 2011 and the Gas Price Outlook
bump





GLP