Why Oil Prices Don’t Make Sense

Today, we’re all feeling the crunch when we visit the gas pumps – thanks to Stinky Joe.  But there’s something not quite right as to why current oil prices don’t make sense.

If you recall, just over a year ago we had gas prices in the $1.78 range.

But that all changed after 81 million alleged votes put the Stinkmeister in office because they didn’t like Trump’s mean tweets.

It would be interesting to know what those same 81 million are thinking about today with average gas prices in the $3.45-3.50 range.

To be fair, the average gas price in 2020 was $2.17.

Do the math.

3.45 – 2.17 = 1.28.

1.28 divided by 2.17 = a 59% increase in gasoline.

And how many people saw their income increase by 59% in the last year?

But I digress.

What’s more disturbing is how very few people are mentioning the increasing price of a barrel of oil…currently around $88 per barrel.

Why do I bring this up?

Glad you asked.

The highest average price of gasoline was $4.10 per gallon waaaaayyyy back in July of 2008.

The big difference is the price of a barrel of oil in July 2008 was a whopping $147.00 pr barrel.

Prices Don’t Make Sense

Again, let’s do some math.

Oil at 147 per barrel – compared to 88 per barrel – is a whopping 67% increase in price.

But the difference between $4.10 per gallon and $3.45 per gallon is a mere 19% increase.

So – all things being equal – we’re actually paying a higher premium (no pun intended) for gas today then we did back in 2008.

Does that make sense?

Maybe my math is off and prices really aren’t so bad.

Or Maybe the Big Oil Companies are giving up all their profits to help us out…NNAAAAAHHHH!

Or Maybe JUST MAYBE this is the calm before the energy storm where the Saudi’s flip the bird to the USA and have already cut better deals with China, Russia, and the rest of the world.

In case you haven’t noticed, the Saudi’s have been very quiet lately.

And they’re certainly not going to show their cards on the geopolitical board until they know that someone besides the USA will protect them from other Oil Producing countries.

Oil Prices Net Effect?

Suffice it to say that gas prices aren’t going down anytime soon.

If they do, you should take it as an opportunity to increase your energy holdings.

Be on the lookout for our February newsletter where we’ll feature a story linking the Vegas Shootings in 2017 (remember those?) with the Saudis and what they’re planning to do in 2022 (HERE).

Share this with a friend…especially if they’re sick of increasing gasoline prices.

They’ll thank YOU later.

We’re Not Just About Finance.

https://www.financialsmatter.com/connecting-the-dots/

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