OK, so I noticed that gas at the station I usually buy at seems to have gone up 13 cents a gallon just in the past 24 hours. Coincidentally, a Washington Monthly blog also looks at this, in the context of the election. As you may tell from the URL, the writer wonders whether gas prices are being deliberately pushed higher to hurt the incumbent President (though he acknowledges that if it is happening, it’s probably to make money first and foremost, with the hurting of the President a nice bonus).
What do you think of these musings? What are the prospects of $5 a gallon gas by Election Day? How high an impact will a visible cost like gas prices have on the election? What exactly can/will Obama do without looking ineffectual or raising a red flag for no good reason?
$5 a gallon gas would have an impact on election day, yes. More normal fluctuations would not.
The idea that gasoline (a commodity traded on open markets) is having its price manipulated on a macroeconomic level to hurt President Obama’s chances at re-election is quite simply retarded and that writer from the Washington Monthly probably has absolutely no idea how commodities markets work or how futures contracts play into gasoline pricing and etc.
Since I hear this so often, and I tend to not believe anything a journalists says, I thought I would check this. The EIA keeps monthly average regular unleaded retail gasoline prices going back to 1976. The raw data can be found here. Counting December, January, February as Winter; March, April, May as Spring; June, July, August as Summer; and September, October, November as Fall, we get the following.
Winter was the highest average price 16 times, Spring was 2 times, Summer was 7 times, and Fall was 11 times.
I know the quote technically said price of gas rising, therefore, indicating change in price. Here’s how that works out. April, May, and March (in that order) have the highest average increase in prices (all typically considered Spring). The summer months of June, July, and August collectively average an average decrease in prices of 3 one hundreths of a cent.
So, to summarize, prices average a slight decline during the summer months; prices rise the most during the Spring. Despite this rise in the Spring leading up to the Summer, the Summer has not usually been the highest priced season of the year.
If he’s wondering that, you can simply discount what he’s saying, since he pretty obviously doesn’t know what he’s talking about and has a CT orientation and sadly none of the good reporter skills of doing research on the subject he’s talking about. There have been any number of assertions throughout the years that gas prices are being manipulated for various reasons, mostly revolving around Profit™!!, but it’s pretty much the same argument with the twist of being a CT about getting rid of Obama.
That they have no more substance to them then the other assertions that Big Oil™ was manipulating the market to raise the price of gas at the pump. The caveat being that there IS an oil cartel that is able to set production levels, thus manipulating the price of oil per barrel to some non-zero amount. And certainly this does have an effect on the price of gas at the pump, though there are plenty of other, more reasonable factors that make the price fluctuate than the Republicans/Big Oil/Big Business/etc trying to get rid of Obama.
It would certainly have a non-zero effect on the election, but it will depend on what the rest of the economy is doing…or not doing. Right now, if the current trend continues, I’d say that $5/gallon gas at the pump would have a pretty slight negative effect, but overall the economy seems to be doing better, if not spectacularly so, and that will have a greater effect. If the economy tanks in the next few months then it won’t matter if gas is $2.50/gallon…Obama is probably doomed. If the economy booms in the same time period, then Obama is probably going to have a cake walk (he probably will anyway, IMHO), even if gas goes up to $5 or even $6/gallon. If the economy merely stays where it’s at, and gas goes up a dollar or so in short term spikes then it probably won’t have much of an effect.
Certainly they will…they’d be fools not to at least try it and see if it’s got legs. They will use everything and anything against him, if it seems to have some traction with voters, especially non-Republican aligned voters. They will try and ramp up the fear if that works…fear of rising gas prices and an economy ready to nose dive off a cliff, if they can get people to buy into that. And, since a lot of threads about the price of gas at the pump seem full of ignorance of how and why the price fluctuates, and ‘common wisdom’ about the reasons, they (the Republicans) might just get some traction from the same mind set as the reporter in the OP.
. . . by a very limited number of wholesale distributors in the U.S., who have a public record of spending enormous amounts of money to fund think-tanks and astroturf organizations and science-whores and PACs and lobbyists and anything at all that might protect their interests in the political sphere (and that’s only the public record) . . .
Someone put the memo out. Its been gas prices continuously all day long as I had the day off and heard about it incessantly. ABC Nightly News lead with it. My liberal newspaper (AJC) front-paged it.
Crude oil went over $115/bbl last spring when Libya erupted then fell well below $90/bbl by late summer.
Expect the right to talk about high gas prices no matter where they go.
You should have seen the frothing at the mouth by people arguing that the GOP/Big Oil/Karl Rove’s Minions were manipulating gas prices lower to help ensure that Repubs get elected. Funny stuff, that.
I’m sorry here in the real world the idea that gas prices are being deliberately manipulated here in the United States to negatively impact Obama is not supported by anyone here by any actual facts. I’m sorry BrainGlutton just saying “gas companies are evillllll dude” isn’t evidence of fucking shit.
Yes, oil prices are influenced by the fact that a large minority of the petroleum industry is controlled by a cartel, but the goal of OPEC has historically been price stabilization not price gouging. I’m not a fan of cartels any more than the next guy, OPEC especially, but there is no evidence they are trying to set prices to hurt Obama.
Instead it looks like futures contracts have gone up because the price of oil has gone up because of concerns about supply issues related to geopolitics and other normal economic concerns.
No, of course not; but it does mean the idea is not entirely preposterous.
OPEC? I thought we were talking about those dudes’ junkies/pushers, the American petroleum companies. Which do take a definite and highly expensive interest in American politics, even when OPEC is indifferent.
We have any evidence in here? Or are you just going to keep talking about how evil corporations are?
I’m sorry, but just calling a corporation evil has jack all to do with demonstrating they have the ability to manipulate the entire domestic petroleum market let alone the ability to manipulate it in an extremely controlled way and in a manner that would be undetectable to the public at large. Even if you can demonstrate that ability you still need some actual evidence they are doing it, and not just pricing their refined products based on, you know, the global price of oil.
If the US economy does recover significantly, gas prices are almost certain to go up significantly, since both commuters and trucks will be driving more. If Europe continues to be a basket case that might help keep the prices down, but the upward trend has only been blunted somewhat by the extended recession.
I don’t think anyone doubts illegal commodities manipulation can happen. What I doubt is macroeconomic level pricing changes can be manipulated by some cabal of evil white dudes in board rooms plotting to unseat a President.
The case you linked to is obviously an example of behavior that was most likely criminal manipulation. However, it took advantage of existing and genuine tightness in the oil futures market. If you read the article from the New York Times about this case it briefly mentions that other factors were at play, but doesn’t really go into it. Basically what happened is in a market where buyers were afraid supply was dwindling, some commodities brokers took advantage of it to make it seem like a supply of a certain type of oil was smaller than it actually was.
Might that have impacted people at the pump? Sure, and I’m sure it did. None of the articles I’ve read about it show how much it might have effected it (they just talk about the general spike in prices during this episode.) For someone not very informed about the markets you might think these two speculators are the entire reason for gas prices going up back in 2011, but in truth they were not. It was a macroeconomic situation and they manipulated a small part of it to make a profit.
You can take advantage of situations like that, but I don’t believe in a market like crude you can actually create those situations. There are too many sources and the market itself is just too heavily monitored. You’ll always be able to catch commodities brokers engaging in illegal speculation, but with the crude market being what it is there is just no way to manipulate it (in secret) to effect a Presidential election. It would require so many participants the world over that you’d basically be entering global conspiracy territory.
