Gas Prices-Whew!

Everybody knows oil prices are climbing… not everyone realizes why or what they can do. I found a site,www.gasbuddy.com, where people ( spotters) send in the lastest prices at gas stations in their area so that we all can do some comparison shopping at the pump- just knowing if the cheapest price is on your way somewhere can save the pennies that make an overall difference.

Lots of the reason that prices of oil have gone up is speculation on things like that fact that some of our refineries have had problems, etc. (outages were a problem more than a dozen refineries according to one source ). It isn’t a reflection of what the gas we are using now actually costs… that was determined some time ago, and the $66+ a barrel is the futures market. Which means it will impact us all in time.

I’m no financial guru, just a mom trying to make ends meet. But that doesn’t mean I have to be dumb about budget planning! Since the figures on inflation for July have risen, that means more rises in interest rates, and the gas prices are affecting everything, so it’s time for a little frugality. Or in the case of some of us, a little more frugality. It’s a game, really….. squeeze that stone!

One reason -that we can do something about in our small way- that prices have risen is the the USA is the pushing demand: we are overusing gas and driving the price. U.S. gas consumption, which accounts for more than one-tenth of total world oil demand, is projected to rise 1% this year despite the higher prices, says the U.S. Department of Energy.
I saw on the news how some people are walking instead of driving to work. They do it as a protest of the rising prices, but if we all cut down on use habits we can all help with this part of the problem.

Most of us do what I’ve been doing: combine trips into town to cut down on the gas budget, drive as little and necessarily as possible. In the olden days of the seventies I remember the car pooling. Maybe that is an idea that can be revived.

So while they say that oil prices will modulate- they are probably going to stay pretty high over the long term and the sooner we develop responsible habits in conservation, the better. Plus you sometimes have side effects that are beneficial. While I can’t walk ten miles into to town for groceries, people in town could increase their excercise quota by walking a few blocks instead of driving. Maybe front porch hellos could come back in fashion ( ok, I’m kidding on this one)…. but we could probably gain ground in our basic budget and in our family and personal time if we jumped in the car less during the week. Maybe. It’s a thought.

In the meantime,

How could stocks shoot up like that on a day[Aug 12] when oil traded as high as 66 bucks a barrel and closed well over 65 dollars? The only way this makes sense is that the economy is still strong in spite of these sky high oil prices.

And that’s because, the economists tell me, oil prices over the past few years are higher, and much higher over the past few weeks, but income in that period – of consumers and businesses – is up by a larger amount, so the middle-income and higher among us can well afford them.

And remember, unlike the 70’s and 80’s and 90’s oil shocks, this spike up in oil is not being caused by a supply disruption that is cutting off supplies of oil and forcing prices higher (remember the Arab embargo? Remember when Iraq invaded Kuwait?) and therefore clobbering consumers and the economy. This time it’s U.S. consumers and businesses who are spending and driving the economy and driving demand for oil and gas and heating oil higher.

We buy a lot of stuff from China and they are still pretty much booming and they are consuming more oil too. So what we see is we are all driving the economy and therefore sending oil higher instead of oil driving the economy lower. -Kathleen Hays is economics correspondent for CNN