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Do I detect a pattern here...?

GaryVincent | 21 December, 2006 18:00 | (654)

The government this week reported on the November Producer Price Index, which is commonly described as a guage of prices at the wholesale level. The wholesale price index, according to an Associated Press story, was up 2 percent in November. This followed declines of 1.3 percent and 1.6 percent in September and October, respectively.

The big jump in November's wholesale prices was caused, the report said, almost entirely by a jump in energy prices. The overall wholesale price jump was the largest for one month in more than 30 years. Gasoline prices led the way, with a 17.9 percent jump. But natural gas, fuel oil, and heating oil prices were up sharply also.The reason that such an increase is worrisome is that it might motivate the Federal Reserve to hike interest rates to try to control inflation. But such a hike would also be a blow to the already stumbling housing market, as well as sales of cars and other big-ticket items.

The AP noted that the big declines in the September and October wholesale price index were mostly attributable to sharp declines in energy prices. You don't say. At my local Cumberland Farms/Gulf gas station the price of regular gas dropped sharply in September and kept falling in October until it bottomed out at $2.09 per gallon. It stayed at that price until about November 10, when the price began climbing. It's now at $2.25.

The AP reported the wholeprice numbers in the AP's usual flat, dry style for such economic news, with not much context except for noting that it was the biggest one month jump since 1974.

Let's see here: Big energy price declines in September and October. Then a huge jump in November, specifically (if the local Cumberland Farms is a guide) around the 10th of November and continuing to the end of the month.

Is it just me? Does anyone see a pattern here? One "analyst" quoted in a recent story said that it was just that there was a temporary "glut" of oil which the market had absorbed by early November. That must be it. Just coincidence that this temporary glut just happened to map exactly to the election season.

Sure, I believe that. After all, I read it in the papers.

Robber Barrons back on top of their game [Reply]

Americans are stupid and cowardly when it comes to facing corruption in politics and business. We can be counted upon to sit on our thumbs and do NOTHING! The pattern you see is business as usual and every single one of us is so busy clinging to our own scraps of cash and turf we cannot lift our heads to witness the thievery and deception around us. What a pack of morons we are!

Posted by: Brenna Ewing | December 26, 2006, 07:52

Speculation [Reply]

Although I appreciate Ms. Ewing’s “if you don’t believe Michael Moore you’re a moron” approach to economic debate I think there is a much simpler explanation.

An unfortunate truth, to coin a phrase, is oil is a commodity. Additionally, OPEC (made up largely of countries who like to see the US suffer) controls about 40 percent of the world’s oil production. OPEC has already cut production once and has announced a further cut. All this in a quarter when oil demand generally peaks as gasoline and heating oil needs combine to tax production capabilities.

http://www.dfw.com/mld/dfw/16315958.htm

Posted by: Eric | December 26, 2006, 08:21

Is this a conpiracy also? [Reply]

Perhaps the ombudsman would like to offer idle speculation on this latest trend in oil prices?

NEW YORK — Oil prices fell Wednesday after the government reported swelling inventories of gasoline, heating oil and diesel fuel.

Crude oil stocks declined for the fourth straight week, according to a weekly inventory report by the Energy Information Administration. Despite the pull on crude stocks, inventories of refined products grew faster than market analysts had expected, pressuring prices lower.

Light, sweet crude for February delivery dropped $1.12 to $54.52 a barrel on the New York Mercantile Exchange. On Tuesday, the contract plunged to 18-month lows before paring its losses late in the session.

Posted by: Eric | January 10, 2007, 11:42

Still nothing to say [Reply]

Do I detect a pattern here? Democrats take over Congress and the price of oil falls..... Interesting, must be something more at play here, maybe Nancy Pelosi finally got through to "big oil" right? Riiighht...

LONDON (Reuters) - Oil fell to a 20-month low on Wednesday, within striking distance of the psychologically key $50 mark, as top exporter Saudi Arabia saw no reason to worry over the market's 18 percent slide so far this month.

U.S. crude futures tumbled to an intraday low of $50.28 a barrel, the lowest level since May 25, 2005. By 1315 GMT, the February contract traded 83 cents lower at $50.38.

Posted by: Eric | January 17, 2007, 11:58

e-okul [Reply]

thanks

Posted by: e-okul | December 23, 2007, 20:54