Friday, August 28, 2015 05:53pm
North Adams, MA now: 72 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
LOG IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Gas Prices Going Higher
By Bill Schmick On: 04:07PM / Thursday February 23, 2012
Over the last week a flurry of price forecasts for gasoline have reverberated through Wall Street. Some experts are guessing that pump prices could easily top $4 a gallon and possibly higher by Memorial Day this year.

Their forecasts are being extrapolated from the present price of gasoline which averages $3.61 per gallon. That is high for this time of year, since February is usually a period of low gasoline demand. You might think that this year is a bit different since the mild winter and absence of snow throughout much of the country might bolster driving. But demand nationwide is down to 15-year lows.

What has propped up oil prices so far this year is continued instability worldwide. The financial crisis and subsequent recession in Europe, which should have reduced energy demand has been counterbalanced by events in the Middle East. The real culprit in the oil patch appears to be Iran.

The world wants Iran to cease and desist developing nuclear weapons or else. In response, Iran has been threatening to close a key oil avenue through the Strait of Hormuz, if the U.S. and the EU deliver on their intent to apply economic sanctions to their country. As a result, the price of oil has been flirting with $100-barrel level over the last few months and is presently trading above $106.73 a barrel for West Texas crude. The threat of higher oil prices if Iran were to embargo Europe or the U.S. is real. Iran boasts the world's fourth-largest proven oil reserves and the world's second largest natural gas reserves.

Middle East tensions are nothing new. The oil market periodically moves up and down with unfolding events in that region. Spikes tend to be short-lived but everyone from the Fed on down pays attention to trends. What makes this situation a little different than usual is that the tensions are occurring just at the moment when the U.S. economy appears to be picking up some speed.

The last thing this country needs right now is for oil/gasoline prices to trend higher. I have written at length on how energy prices are another form of tax on American consumers. Although energy prices account for only 5 percent of our overall spending, it is spending that cannot easily be cut back. If the experts are right and gasoline prices move higher as a result of a stronger demand and the continuation of political tensions, then consumers might be paying a few hundred dollars more this summer for gasoline.

That is a lot of money when multiplied by the number of Americans driving cars, trucks, buses and motorcycles. If past behavior is any guide, consumers will fork over the extra money for gas but at the same time cut spending on other things like restaurants, vacations, and shopping at the mall. Higher energy prices will also take a bite out of profits in Corporate America. It will also mean higher prices from everything from diapers to tires as companies attempt to pass on the higher energy costs to consumers.

Unfortunately, higher energy prices are here to stay as long as this country fails to develop a comprehensive energy plan that will reduce our dependency on oil. Until then, we will remain hostage to every two-bit, oil-rich dictator or wanna-be nation that takes a swipe at us. 

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at (toll free) or email him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.




1 Comments
     
News Headlines
Adams & Cheshire School Bus Route 2015
Williams College Class of 2019 Set to Arrive Aug. 31
YMCA Accepting Registration for Elementary School-Age Programs
'Mile in Her Shoes Art Show' Seeks Participating Artists
Berkshire Bank Names MacDonald SVP Corporate Auto Sales Leader
Cultural Pittsfield This Week: Aug. 28-Sept. 3
Berkshire Opera Festival Appoints First Director of Development
Adams-Cheshire Makes High School Pitch to Lanesborough
Opened or Closed? Debate Over Kirvin Park's Gate Grows
North Adams Neighborhood Opposed to Bike Path Plan

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (177)
Independent Investor (241)
Archives:
August 2015 (5)
August 2014 (2)
July 2015 (6)
June 2015 (8)
May 2015 (6)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
Tags:
Banks Japan Stimulus Housing Taxes Interest Rates Currency Deficit Federal Reserve Election Commodities Markets Congress Economy Fiscal Cliff Selloff Debt Euro Stocks Greece Europe Metals Oil Stock Market Bailout Retirement Debt Ceiling Fed Recession Energy Europe Rally Jobs Pullback Crisis
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
Recent Entries:
@theMarket: Markets Are Supposed to Pullback
The Independent Investor: Not All Bonds Are the Same
The Independent Investor: The Risk of Rising Rates
The Independent Investor: Boomers' Kids Don't Want Your Stuff
@theMarket: Month-End Musings
The Independent Investor: Supermarkets Evolve to Survive
The Independent Investor: Are You Ready for El Niño
@theMarket: O Ye of Little Faith
The Independent Investor: When 'No' Means 'Yes'
@theMarket: Global Markets Weather a Wild Week


Live on the Lake: Madison...
Madison Avenue wrapped up the 2015 Live on the Lake concert...
Whitman's Wins Torchia League...
The Pat Torchia Women's Softball League playoffs concluded...
Berkshires Craft Beer Fest...
The 9th annual Western Mass beer festival drew hundreds of...
Pat Torchia Women's Softball...
Whitman's took the first game in the best two out of three...
Third Thursday August 2015
It was another beautiful night for 3rd Thursday on North...
Berkshire Chamber @ Darrow...
The Berkshire Chamber of Commerce held its monthly...
Shire City Sessions August...
Wild Adriatic performs at Monday's Shire City Sessions, a...
BYP Networking @WTF
The Berkshire Young Professionals held its networking event...
Softball: VFW Post vs Pizza...
VFW Post vs Pizza House at DiSanti field on Monday night.
Second Cheshire Block Party
Cheshire resident enjoyed good food and music by the...
Downtown Celebration 2015
The annual Downtown Celebration brought hundreds to Main...
Pittsfield Ethnic Fair
Pittsfield Ethnic Fair was held at the Pittsfield Common on...
Annual Cruz Nite And...
Cheshire residents enjoyed classic cars, good food, a BMX...
Adams National Night Out 2015
Adams recognized its first responders on Tuesday night...
National Night Out 2015
Neighborhoods in North Adams marked the annual National...
Adams Aggie Demo Derby 2015
Crash! Boom! Bang! The annual Aggie Fair demolition derby...
Live on the Lake: Madison...
Madison Avenue wrapped up the 2015 Live on the Lake concert...
Whitman's Wins Torchia League...
The Pat Torchia Women's Softball League playoffs concluded...
Berkshires Craft Beer Fest...
The 9th annual Western Mass beer festival drew hundreds of...
Pat Torchia Women's Softball...
Whitman's took the first game in the best two out of three...
Third Thursday August 2015
It was another beautiful night for 3rd Thursday on North...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings |
Advertise | Recommend This Page | Help Contact Us
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2012 Boxcar Media LLC - All rights reserved

Privacy Policy| User Agreement