Higher Prices Coming

Don M.

Don M.

SF VIP
Location
central Missouri
Crude oil futures hit almost $90 a barrel today....compared to what is normally about $40/B this time of year. Some of the "experts" are saying that oil could reach well over $120/B as Spring arrives, and driving picks up. In some States with high fuel taxes, such as California, that could translate into prices at the pump soaring well into the 5 or 6 dollars a gallon range.

Even if you don't drive, these prices will be reflected at the grocery stores, etc., as delivery charges increase. Inflation is going to continue to be a problem, as a result, and affect those on a fixed income the most. Sooo...start budgeting...
 

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Tomorrow's CPI report will likely be between 7.04% and 7.40% annual. The 7.04% would match the 2-1982 number. For 2 straight months the headlines have been "highest in nearly 40 years". Tomorrow will likely be "highest in over 40 years."

As for petroleum products, demand is outstripping supply, just like a lot of other "stuff", imo.
 
Not good news, so people better have a plan. Heat and hot water are included in our carrying charges (co-op HOAs). They just raised ours by $50 a month partly to cover the rise in taxes. Even if our heating bill is impacted, I doubt they'll raise it again before the year is out. I feel for those who have to heat their homes and buy gas.
 
Well I've been telling you all for the last 2 years the huge prices we're paying for oil and petrol in this country.. currently an average of £1.47 per LITRE for the cheapest unleaded..... not gallon..but litre... there are 4.56 litres in an imperial Gallon , that's £6.70 per gallon... the equivalent of $.9.07 US at the current exchange rate ..per GALLON.

Now our Gas and electricity is set to increase by a massive 50 % per year.. from April this year... but no increases in salaries or pensions... ..
 
hollydolly said:
£1.47 per LITRE for the cheapest unleaded..... not gallon..but litre... there are 4.56 litres in an imperial Gallon , that's £6.70 per gallon... the equivalent of $.9.07 US at the current exchange rate ..per GALLON
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I believe most of the price difference from country to country is taxation. You pay more taxes than we do, on fuel anyway. 20 or 30 years ago the differences were even greater, our taxes have gone up. I remember back in the 90s a liter of fuel in Europe cost about the same as a gallon in the US. Today its more like 2 liters to a gallon.

Our prices also vary a lot from state to state, again mostly based on taxes. California is a partial exception, they have some pretty stringent requirements on the fuel and its makeup that adds to the cost.

Your fuel costs are higher than most, but less than a lot of European countries. Worldwide Hong Kong is the highest, Venezuela lowest.

https://www.globalpetrolprices.com/gasoline_prices/
 
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hollydolly said:
Well I've been telling you all for the last 2 years the huge prices we're paying for oil and petrol in this country.. currently an average of £1.47 per LITRE for the cheapest unleaded..... not gallon..but litre... there are 4.56 litres in an imperial Gallon , that's £6.70 per gallon... the equivalent of $.9.07 US at the current exchange rate ..per GALLON.

Now our Gas and electricity is set to increase by a massive 50 % per year.. from April this year... but no increases in salaries or pensions... ..
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If you think it's bad now, depending on how this Ukraine thing goes current gas and electricity prices may seem like the good old days.
 
The rising price of nearly everything is showing no signs of slowing down. This evening, the news said that both Ford and GM are cutting back production as a result of this Canadian truckers boycott, and they are running out of parts for new car production. That, and the "chip" shortage have resulted in over 80% of new car buyers paying more than the sticker price for new vehicles in the past year. This trucker action, and the port backlogs on the West coast are causing supply issues on an increasing number of consumer products.

Bottom line....expect 2022 inflation numbers to be as bad, or worse than what we saw in 2021.
 
hollydolly said:
Yes I know all that... but knowing it doesn't help us find the money to pay it.... we also have some of the lowest salaries ...
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Europe is especially vulnerable to rising energy costs, as most of their fuel comes from other nations. This Ukraine mess could make things even worse....as part of the negotiations involve approval of the Nord Stream pipeline coming from Russia. If Russia moves on Ukraine, that pipeline could be history, and Europe would have even less fuel.
 
Don M. said:
Crude oil futures hit almost $90 a barrel today....compared to what is normally about $40/B this time of year. Some of the "experts" are saying that oil could reach well over $120/B as Spring arrives, and driving picks up. In some States with high fuel taxes, such as California, that could translate into prices at the pump soaring well into the 5 or 6 dollars a gallon range.

Even if you don't drive, these prices will be reflected at the grocery stores, etc., as delivery charges increase. Inflation is going to continue to be a problem, as a result, and affect those on a fixed income the most. Sooo...start budgeting...
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I'm in California. I filled up my gas tank today at $5.03/gallon. I drive plenty of miles each day for work. I can easily spend over $300 on gas alone each week. Good thing my employer reimburses for mileage at 32 cents/mile. Hopefully, they'll raise this reimbursement rate due to rising gas prices!
 
Ceege said:
If you ever watch the Johnny Carson Show at night, you will hear him talk about many problems that we have today. Including inflation.
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Some of the old time radio shows from the late 40s had jokes along the same lines, after rationing ended. I remember those comments from Johnny's opening monologue, from the 70s up to 1982 (when inflation came to a sudden stop). After a while the jokes weren't so funny when mortgage rates passed 12%.
 
Don M. said:
Europe is especially vulnerable to rising energy costs, as most of their fuel comes from other nations. This Ukraine mess could make things even worse....as part of the negotiations involve approval of the Nord Stream pipeline coming from Russia. If Russia moves on Ukraine, that pipeline could be history, and Europe would have even less fuel.
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Some recent good news, the US has asked Asian countries which purchase LNG (liquified natural gas) from the US to defer part of their shipments so that more LNG production can be sent to Europe. The US (no. 1) and Qatar (no. 2) are by far the two largest players in LNG exports. A major portion of US exports are now being diverted to help Europe through the winter.
 
As the conversation seems to have a shift towards natural gas... Gazprom (Russia) is collecting big money from Europe with just the notion of gas being reduced and the threat of invading Ukraine. Russia (Gazprom) has a winning hand and invading Ukraine makes the hand weaker. Europe is shifting away from coal and nuclear , towards solar and wind and has decreed NatGas as the bridge, while mostly banning fracking.

Europe will continue along their current path, eventually approving Nordstream 2 and becoming Russia's b!t?? It's in the cards and Russia is holding most of them.

As for LNG and CNG, there are currently not enough ships on the water to offset the long term needs of Europe. While our natgas has gone up about 300% over the past year, Europe has gone up over 600%. More ships would bring down Europe's price while driving up the U.S. price.

BTW, U.S. Natgas storage is trending toward the lower end of the 5 year range and that is before this last cold snap.
 
It was easy to get spoiled with inflation abnormally low for 12 yrs (2009 to 2020). Historically it averages around 3%. So this swing has happened before, and will happen again at some point, as we bounce our way back to the average over the long term.
U.S. Inflation Rate by Year From 1929 to 2023

This year's bump is a reminder of why good retirement planning includes allowing for inflation's erosion of buying power. Perhaps you remember your parents and/or grandparents complaining, "Why, I remember when I only had to pay 5 cents to ride the bus!", as you (as a kid) rolled your eyes at them and dropped your quarter into the farebox, LOL.
 
Collectively the bond markets are saying this inflation scare is going to be a head fake …with long term bond rates at just 2.25% in 7% inflation the bond market is saying a slow down is in the cards and rates will be forced to be lowered to avoid recession and deflation
 
In the early 70's gas was 35 cents a gallon.
So I'm not a believer that inflation is just a
"head fake" and will slow down or be lowered.
Not for long anyway.
 

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