Reminder: Obama Administration Wants $8/Gallon Gas. Mission Almost Accomplished!

Energy Secretary Steven Chu said he thinks the US should be paying the same per gallon as Europeans do. At the time he said that gas in Europe was about $8 per gallon.

Well, it's Halftime In America for gas prices baby!

Average retail gasoline prices in California have risen 18.8 cents per gallon in the past week, averaging $4.01/g yesterday. This compares with the national average that has increased 4.5 cents per gallon in the last week to $3.51/g, according to gasoline price website CaliforniaGasPrices.com.

And it's coming to the rest of the country soon.

The price of unleaded gasoline in the U.S. will likely hit a nationwide average of $4 by this summer, said Dan Dicker, oil trader and author of “Oil’s Endless Bid.” The last time prices topped $4 was 2008 and Dicker said there’s a one in three chance that gas could reach $5 a gallon.

If gas prices do head to those lofty levels, that could put a crimp in the economic recovery as consumers will likely cut down on spending if they have to pay more to fill up their cars.

Just last month, higher gas prices were to blame for an uptick in inflation. And it’s not just consumers who will suffer. Companies facing higher shipping costs may reel in their hiring plans, slowing job growth and putting a crimp into the overall economic recovery.

“This price juggernaut has taken on a life of its own since the Iran/Israeli threat flinging began and [the] boycott/sanctions war continues to ratchet upwards, and it’s been made worse by the big run in stocks since the start of the year,” said Dicker.

Of course Democrats and their stenographers in the media will argue that none of this is Obama's fault. It's all Iran's fault, they say. Now technically, yes, instability caused by Iran is too blame for much of the recent hikes but there were also reasons beyond George W. Bush's control and yet we know he got all the blame back in 2008.

As an aside, Iran's cut in supply and the subsequent hike in crude futures demonstrates the exact opposite of what people who oppose taking action on Iran will claim. One of their big arguments is an attack on Iran will lead to spike in oil prices. Well....Iran just showed it can do that anytime it wants. Imagine how a nuclear armed Iran will be able to control oil prices by simply issuing a nasty press release attacking the Saudis. It's not an either/or proposition. Iran will mess with oil markets, the question is will they have a nuke when they do it.

When the spike really hits and Republicans claim we need more domestic supply the Democrats will say what they always say, "It will take a decade to get more supply online, we need conservation and unicorn power!", remind them if they had listened to us 10 years ago, we'd have more supply coming online right...about...now.

posted by DrewM. at 05:16 PM

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