Crude, Crude Summer
By now we all know that gas prices are on the rise, with crude oil topping $106/barrel and pump-watchers bracing for $6 gas. Despite the President having previously heralded rising gas prices as a good thing for the economy, so long as it's "a gradual adjustment," and his energy secretary being on record pining for much higher, European-level gas prices, election-year-Obama now feels it's time to address the worrisome run-up.
But given historical seasonal fluctuations in oil and gas prices, if the administration has readied any fresh excuses (those already trotted out include "things beyond our control, like unrest in the Middle East or other factors like the growth of emerging countries such as China and India"), particularly any that divert attention from their own track record of quashing domestic exploration and upturning their nose at supply from friendly neighboring countries, they may want to keep those arrows quivered for another few months.
February is not typically a month when we see energy prices cresting. Instead, prices tend to rise as we get into the summer driving months (and, inconveniently, as we enter the general election season). Over the last six years, crude oil climbed an average of 44% from its late February level before reaching its calendar year high (on average, it took about six months to get there).
A similar run-up from this week's average of more than $105/barrel would have us cruising past $150 by the end of August, surpassing the record weekly average price seen during the 2008 oil bubble.
(One could argue that the bubble year was anomalous and should be dropped from the data, though doing so only brings down the average run-up from February prices from 44% to 43%.*)
Below, the blue line represents the average weekly crude price since 2006. The red arrows are the price change from late February to the respective yearly highs. The dotted arrow represents a 44% jump from current prices over the next six months.
If this were to play out, $6 a gallon might start to sound pretty good.
* A better pruning might be to toss out the year following the bubble (2009), when prices rebounded from the burst, rocketing more than 100% from late February levels. Stripping out 2009 gives you an average run-up of 32%, suggesting a 2012 peak of roughly $140.
Handcrafted by Flip on February 23, 2012 |
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