Petroleum Pricing

By Econ70 | 09/25/2013

In a sign domestic oil prices are expected to fall in the future, the price of futures contracts on West Texas Intermediate oil are cheaper the further into the future the settlement date. Futures prices are usually higher than current prices because futures prices must include storage, carrying costs and more. Reasons for this inversion…

Read More

Out of Gas

By Econ70 | 03/20/2012

While gasoline prices have risen dramatically, and now average $3.80 a gallon, its impact has been muted. This is because natural gas prices have collapsed, falling 42% from a year ago, due to abundant supply and an unusually warm winter. I estimate that collapsing natural gas prices have mitigated two-thirds of the run-up in gasoline…

Read More

Mixed Data

By Econ70 | 03/19/2012

Recent economic data are mixed. On one hand, the job market is doing well, bank lending is rising, and car sales are zooming. But, gasoline prices are up, real after-tax incomes are almost flat — causing consumer spending to grow a tiny inflation-adjusted 0.6% between 7/11 and 1/12 — and GDP growth is tepid. Either…

Read More