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Gasoline cost to jump $700 for average household | Reuters.

There is a 25 percent chance the pump price will exceed $4 a gallon from June through August, the agency said, compared with a 10 percent probability gasoline could fall below $3 during the same period.

My Note –

I think they need to review their math skills at the agency where they made this projection. It is wrong.

The price of gasoline is already at or over $4.00 a gallon in Chicago, it has been reported. And, it is over $4 a gallon in California, Denver and probably anywhere Spring Break destinations are used to having a captive audience.

Summer will be even more so. My guess is that the price of gasoline will go up substantially higher than that because the traders and speculators driving the prices per barrel are already trying to figure out how to offload what they’ve purchased and make a bigger profit from it. They likely figure this is one of those once in a lifetime deals where they can really make a killing. That would be my guess. It will stagger through the economy faster than the contracts that will get delivered because that is how it has done in the past (2008, 1970’s) as companies try to get ahead of the upswing in costs to have a buffer.

On a personal note, as I have noticed in the stores when I stopped buying cereal – it the boxes that cost nearly $5 already get any skinnier – we can use them as postage stamps instead. I don’t know how they get away with it. Many foods now look like something from a child’s play kitchen set with little in it at all. That is going to be even more so as the commodities prices have been driving upwards by the traders on the exchanges and now add the increased price of oil, gasoline, shipping and increased cargo charges to them. It is not going to work.

The law of supply and demand would naturally bring these prices down or the quantities up because there cannot possibly be as many people buying these things at these prices for the amount of product offered. But, the free market doesn’t exist in America in that sense. It is unnaturally supported in the manner middlemen including the commodities traders are driving the prices. The losses can be written off and it doesn’t yield any incentive to meet the market demand where it is and price competitively to it at the real value.

Oh well. If we had a better deal on the oil that is being pulled out of the ground in America, like Libya’s foul leaders got from the oil industries – we wouldn’t even be having this problem.

They only give away 12% of the profits and charge a “sign-on” bonus over a billion dollars each to the oil companies (and they are glad to get it.) Damn ridiculous while we are subsidizing the oil companies and begging them to do whatever they will to get our oil out of the ground so they can profit at our expense. Damn ridiculous.

– cricketdiane