kidmercury

Below is the six month chart of USO, an ETF that tracks the price of oil. Higher oil prices = higher prices at the gas pump.


Clearly the chart is going down. So WTF is up with oil prices (and thus prices at the gas pump), and where are we headed?

Well, even if you view the current environment as deflationary, which I do not, oil should be doing better than it is. In deflation, oil should fall less than stocks, which has not been the case.

Moreover, as I've been saying for a while, I expect inflation (meaning weaker currency and higher prices) to be the dominant concern by the end of 2012, probably sooner -- in fact probably by the end of the year. And so I expect oil prices to go up. In fact, I expect gas prices to exceed the highs they reached in the first half of 2008.

The Gas Price Conspiracy

Lindsey Williams was one of the few people who said oil was going from $150 to $50. Williams is not a trader or market analyst, but rather gets his information from an oil company insider. Williams says this is being done to make the oil companies unprofitable, so as to create a pretext for them to be nationalized -- thus advancing the New World Order agenda.

Williams has been saying the oil companies would be nationalized for some time. He dedicated an entire chapter of his book, Energy Non-Crisis (which is about how energy resource scarcities, particularly oil, are being engineered intentionally as a way of controlling society). You can read this chapter from his book online for free here. According to Williams, this plan is over 30 years in the making.

I don't know if Williams is right. Certainly, the big idea of there being energy resource suppression as a way of controlling society seems very true to me, as I've seen too much verifiable evidence from a wide variety of sources that supports this notion.

Anyway, Williams has said that we will start to see significantly higher prices in the second half of 2009, and that what happened in Iceland will happen here in the US at that time (significant currency devaluation and higher prices). Certainly this makes sense when one looks at the macroeconomic condition of the United States, conditions which are being further aggravated by the Obama administration's initiatives to take money and give it to bankers.

So now you know WTF is up with gas prices. Be sure to spread the word.

Unregistered

First off your a moron for believing in crack pot theories. Then an asshole for repeating them. You don't understand how the market works and that is VERY clear in your post. Which is fine. Most people don't understand it which is why they make up bullshit theories on how it works then claim it as fact. According to the Refinery Utilization and Capacity the refineries are running about 88.8 percent capacity This is because some of the plants are shut down for repair but also the price for crude is low so making more gas only makes the company to loose money per gallon. This is because the demand is anemic Not to mention the price for that oil that is reported is not the REAL price. This is called the Nymex (New York Mercantile Exchange) rate. But their are other types of crude that are bought, such as Brent or Maya, trade about $10-a-barrel higher then the price coming from Nymex. So their profit after refining it could be low as fifteen bucks a barrel. So they scaled back for awhile so they service the machines and let the price rise then dial in on demand for the summer months. So in the end they meet their costs and YOU the consumer get firm gas prices.

The price for gas is going to be around $2.50 a gallon through March which in turn will boosts production from the refineries. The price will rise but should stabilize and hold steady. See wasn't that fun?! You learned something today.

kidmercury

It is true I am not knowledgeable about production and refineries. Lindsey Williams is, however, as he goes into the details of this matter in his book. The accuracy of his details is not something I can confirm, though I do find it interesting that he was able to call oil going to $50 when it was at $150.

Regardless, the reason oil prices are destined to go higher on a four year outlook (and not merely stabilize as you suggest) is because of dollar devaluation, which was the principle reason they went so high in 2008. Remember that demand destruction began BEFORE gas prices started falling. In fact, it was high gas prices that created initial demand destruction, but gas prices kept rising even as demand was falling. When prices rise as demand drops, it is a sign of currency instability (i.e. stagflation). Over the past few months we've seen the dollar strengthen, though rest assured the four year outlook remains the same, as the underlying fundamentals of the US dollar are still atrocious, and getting worse with each passing minute Obama and his cronies are in office.

Your thesis that prices will stabilize ignores the fact that dollar devaluation is a critical factor in determining the price of oil.

Looks like we both learned something today.

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