High gas prices likely to effect holiday spending this year

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High gas prices likely to effect holiday spending this year - CSMonitor.com


High gas prices likely to effect holiday spending this year

Gas prices rose 3.91 cents Thursday, and are expected to continue to rise through the holiday season.

Gas prices are set to increase this holiday season. Prices Thursday, reached $2.806, an increase of 7 cents from the month prior, and 12 cents from this time last year.

By Sandy Shore, Associated Press / November 5, 2010

There's one place holiday shoppers probably won't find a bargain this year: At the gas pump.

The Federal Reserve is taking steps to stimulate the U.S. economy, but those moves are also helping to push oil prices near their high for the year. That increase will eventually translate into higher gas prices.

The national average for a gallon of unleaded gasoline was $2.806 Thursday, according to AAA, Wright Express and Oil Price Information Service. That's about 7 cents more than a month ago and 12 cents above a year ago. It will probably keep rising. Some analysts think the price could be a nickel to a dime more by Thanksgiving.


The Fed plans to buy about $75 billion in bonds per month through the middle of next year, effectively decreasing already low interest rates. That might boost lending but the influx of dollars weakens the value of the U.S currency.

Oil is priced in dollars and becomes cheaper for holders of foreign currency when the dollar falls. And when the dollar weakens, investors would rather hold hard assets like oil and other commodities because that protects them from more weakening and inflation.

The dollar has been getting weaker against other currencies for weeks, since the Fed signaled its stimulus efforts in late August. Oil rose from about $72 in early September to above $86, while regular gasoline jumped from an average of $2.68 per gallon to almost $2.81.

Besides higher prices at the pump, consumers will also pay more for basics like food.

"Effectively, what the Fed did yesterday was impose a new tax on consumers," Cameron Hanover analyst Peter Beutel said.

Oil prices hit a high for the year of $87.15 a barrel in early May, when gas pump prices were around $2.90 a gallon. They're heading back there again.

For every penny the price at the pump increases, it costs consumers an additional $4 million, Beutel said. If the price rises a dime, it means consumers pay $40 million more each day that 10-cent hike is in place.

At the current national average of $2.80 per gallon, a typical motorist using about 50 gallons of fuel per month will spend about $140.

"Gasoline prices are almost probably, in my opinion, double what they ought to be," said Beutel. "So the question is ... those people who have jobs, how much longer can they afford to pay ever-higher prices at the pump."

Higher gas prices already have prompted some consumers to cut back on discretionary weekend driving, said John Gamel, director of economic analysis for MasterCard Advisors SpendingPulse.

It's similar to the trend in 2008 when drivers reduced travel as gas prices rose above $3.15 a gallon and then spiked at over $4 a gallon.

Diane Swonk, chief economist at Mesirow Financial, thinks higher pump prices mean some discretionary spending could be redirected as well, as consumers cut back on things like entertainment and parties but not necessarily gift purchases.

Typically, about 10 percent to 11 percent of all retail spending in the winter goes to gasoline. That increases to 15 to 16 percent during the summer when more drivers take to the road, said Kamalesh Rao, director of economic research for MasterCard Advisors SpendingPulse.

In Nymex trading in December contracts on Thursday, Benchmark crude rose $1.80 to settle at $86.49 a barrel. Heating oil added 4.52 cents to settle at $2.3731 a gallon, gasoline gained 3.91 cents to settle at $2.1771 a gallon and natural gas added 2 cents to settle at $3.856 per 1,000 cubic feet.

In London, Brent crude climbed by $1.62 to settle at $88 a barrel on the ICE Futures exchange
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8 cents in 10 days..... :Ohno:

Gasoline likely to hit yearly high by Thanksgiving | Business | Dallas Business, Texas B...

Gasoline likely to hit yearly high by Thanksgiving
Posted Monday, Nov. 15, 2010By Sandy Shore

The Associated Press

Going home for the holidays may mean paying the year's highest price for gasoline.

The national average for a gallon of unleaded regular gasoline on Monday was just 3 cents shy of $2.92 a gallon, the 2010 high set in May. Analysts expect prices to continue creeping upward before the long Thanksgiving weekend starts Nov. 24.

But there's no expectation of a holiday driving frenzy. Instead, the higher gas prices can be traced to the rising price of oil, up 15 percent since Labor Day and 4 percent this month. Investors worried about a sluggish U.S. economy and weaker dollar have parked their money in commodities like oil.

The national average for a gallon of unleaded regular gasoline was $2.89 Monday, according to AAA, Wright Express and Oil Price Information Service. That was about 6 cents more than a month ago and nearly 26 cents more than a year ago.

"Fundamentally, we shouldn't see prices that high," said Fred Rozell, retail pricing director at Oil Price Information Service.

Rozell said the national average "may flirt" with $3 a gallon before year's end. PFGBest analyst Phil Flynn was more cautious, calling $3 possible but not inevitable.

Many Americans already are paying $3 a gallon or more. For example, drivers in California, Oregon, Hawaii, Washington, Illinois and New York are seeing prices in a range between $2.98 and $3.52 a gallon.

In Texas, average gasoline prices Monday were: regular, $2.71; mid-grade, $2.87, and premium, $2.97, according to the AAA Daily Fuel Gauge Report. The average for diesel was $3.04.

Regular, mid-grade and premium gasoline prices in the Fort Worth-Arlington area were the same as the statewide averages, but diesel was a penny higher at $3.05.

Meanwhile, oil prices were down 2 cents Monday at $84.86 a barrel. Still, oil traders were encouraged after crude fell Friday on concerns that China would take steps to cool its economic growth.

Christof Ruhl, the chief economist at BP Plc., expects oil prices to hover around $80 a barrel in 2011. He said there might be "a little upward shift if the economy continues to grow," though the sustainability of China's economic growth is a key risk.
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I noticed it! Wish I have bought plenty of Diesel few weeks ago. Oh well. Expect these holidays, prices always goes up and after holiday it goes down. Nuthin new.
 
yizuman said:
Corporate greed at it's finest.

Yiz
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Perhaps you missed this....

The Fed plans to buy about $75 billion in bonds per month through the middle of next year, effectively decreasing already low interest rates. That might boost lending but the influx of dollars weakens the value of the U.S currency.

Oil is priced in dollars and becomes cheaper for holders of foreign currency when the dollar falls. And when the dollar weakens, investors would rather hold hard assets like oil and other commodities because that protects them from more weakening and inflation.

The dollar has been getting weaker against other currencies for weeks, since the Fed signaled its stimulus efforts in late August. Oil rose from about $72 in early September to above $86, while regular gasoline jumped from an average of $2.68 per gallon to almost $2.81.
Click to expand...
 
high gas $$$$

Hello this is joseph williams. I trip to kenndy center for opera in dc and i glanced at the gas stations varies place and sign of price $4.75 for super and reg $3.50 to $3.99 and i lived two place in md and pa. Most of price$2.88 reg and super $2.99 to $3.20. I dont like too high price gas, people needs to find cheaper the price gas ,good for drivers to work and vacation trip affordable better than stay home and cannot afford the high $ gas,may gave it up job and stay home and applied ssi or ssdi.i have seen it them. I want to support them to keep low the price gas and aviod of applied ssi and ssdi if you could walk exclude deaf.keep that job.
 
.08 cent extra in 10 days means (assuming a 16 gallon gas tank) an extra $1.28 is spent filling up your gas tank. And assume two tankfuls a week is used up from driving means an extra $2.56 which equates to an extra $10.24 a month. So, you're $10 to perhaps $20 less by Christmas time. Although a whole $1.00 upward in change in gas prices means you're $120 to $240 less money at the end of the month.
 
Wirelessly posted (Samsung Epix (i907))

Funny thing gas was cheaper in summer but now its the opposite. It currently 2.75 now
 
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It was $1 a litre a couple days ago, now it's almost $1.13 a litre. What gives?
 
Yesterday it was 2,69 a gallon here and 95 miles away it was 2.79. I didn't go out yet today to see the numbers.
 
Well fuel is around $2.00US a litre here in the UK, so think yourselves lucky!

Fuel keeps going up here too, so all this about "prices dropping abroad due to the weak dollar" makes little sense to me.
 
Sign up Krogers, whatever you have in your location, get 10¢ off on each gallon at any Shell. Hooray!
 
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