The Jingling This Holiday Season Won't Be Extra Change In Your Pockets!

It is extremely hard to miss the hype regarding the historic highs of crude oil. Everywhere you turn, analysts are projecting contradictory price targets. Will OPEC let the prices keep rising? Will we restructure diplomatic relations to stimulate supply flow? With the questions and suggests in the air, there is one thing we know that is a definite... the holiday season gives the gift of demand!

Will crude oil reach $100 a barrel? Although we have seen a small pull-back in recent days, how long until the price climbs with automobile and air travelers packing up for a trip to grandmothers house? Steven Schork of the Schork Report, an industry newsletter, noted that drivers have gotten off easy in recent months. Commuters have not seen a tremendous jump in gas prices, however with many U.S. oil refineries undergoing maintenance and more drivers and airline passengers heading to holiday destinations... demand is set to pick up. Shork also noted the likelihood that we will see less gasoline inventory this spring then previous years, which could push gas prices up to about $4 per gallon.

The high crude oil prices won't just hit you at the pump this year, but they will also slam you at the airline ticket counter. The price of jet fuel has increased consistently for the last 3 years, and airlines are finding it necessary to raise ticket costs to protect their bottom line. Will Alibrandi, an analyst for the aviation market analysis firm Forecast International said, “any cost gets returned to the customer, so they've been bumping up ticket prices to make up the difference." With that said, American Airlines added a $20 fuel surcharge to tickets and other airlines jumped on the price increase bandwagon.

As the holiday season blows into town so will the chill of winter for homeowners using oil to heat their homes. Crude oil prices go up, so price contience consumers try to turn the thermostat down! However, how low can you go when temperatures drop. Homes in the Northeast US will unfortunately bear the burden of rising energy prices this season. The Energy Information Administration projects a 22% increase in heating bills this year than last. YIKES!

We haven't seen the gas prices shoot up to astronomical heights, YET. However, with the holiday season approaching, increasing demand and supply projected to decrease... you can imagine how the prices at the pump and airport will not bring you holiday cheer.

One thought on “The Jingling This Holiday Season Won't Be Extra Change In Your Pockets!

  1. Gas at the pumps and and jet fuel in your plane (my old heap of electrocuted bauxite runs on av-gas) are subject to a whole lot of tax so a doubling of crude doesn't result in a doubling of distillate prices.

    The BIG hassle is food. We've run about turning corn, a food stock for livestock and humans, (Sam Johnson: "oats") into inefficient fuel at a horrendous rate, taking mega acreage out of production from other food stocks while running up feed costs for livestock. We don't tax food all that much, in fact the US tends to subsidize the stuff, so cost increases in foods will be magnified.

    It's the effect commodities of the edible variety will have on household budgets that's going to be wicked.

    But then, governments don't count food or petroleum products any more, do they? We must be discussing things that don't matter...

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