Sunday, February 12, 2012

Gasoline and the Upcoming Election

Most seem to expect that the price of gasoline will rise on the order of 60 cents by this summer, putting the price right around $4 a gallon for most Americans.  That is also right around the price that I think would doom Obama under most circumstances. 

In addition to this, we see that gasoline consumption is way down year over year

This would tend to imply that economically things are a lot worse than we are led to believe.  I have a suspicion that Obama will call for a release of oil from the SPR to attempt to keep gas prices below the psychological value of $4 a gallon.  I'm not sure whether it'll work.  There has been since 2008 a lot of demand destruction in the US for gasoline and oil in general---we're importing a lot less than then--much more so than can be accounted for by increased fuel production inside the US.

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