By RACHEL JONES, Associated Press Writer Rachel Jones, Associated Press Writer – Sun Apr 5, 1:09 am ET
CARACAS, Venezuela – Venezuela has the planet’s cheapest gasoline: At 12 cents a gallon (3 cents a liter), it costs about 30 times less than bottled water.
But falling oil income and sagging crude output could soon mean a pinch at the pump in oil producing countries like Venezuela, where hefty government subsidies have for decades guaranteed cheap fuel.
Iran is already cutting back, while Venezuelan President Hugo Chavez has revived talk of a price hike for the first time in 12 years — a politically unpopular move that two decades ago sparked deadly riots in Caracas.
“One day, prices will need to be adjusted,” Chavez warned recently in a televised speech. “We’re practically giving away gasoline.”
To spread wealth and buy support, many oil producing nations subsidize fuel for domestic consumption. Gasoline sells for as little as 39 cents a gallon (10 cents a liter) in Iran, 60 cents a gallon (16 cents a liter) in Saudi Arabia, and $1.52 a gallon (40 cents a liter) in Iraq, where prices were ratcheted up following the U.S. invasion.
The global economy has crashed, however, and so has the price of oil. The same countries that used billions from crude exports to subsidize gasoline at home, even as prices hit record highs elsewhere in the world, are now under tremendous strain.
Rev. Lindsey Williams claims that Alaska has enough oil to give the US 200 years of energy . He claims there is no energy crisis but that our leaders, who are in business with the Saudis, refuse to drill US oil. Why would drilling US oil cause our economy to collapse?
A quick google search for “gas prices in 2004″ yielded a CNN article where gas prices hit a record high of 1.75 per gallon nationwide in March 2004. Today, I paid $4. Are gas prices really higher or has our dollar just been devalued?
A similar search shows that gold price was $400 per ounce during the same period. Today, gold closed at $908/oz after recently reaching a high of $1000/oz a few months ago. In essence, the price of gold is a reflection of the stength of the dollar. When the dollar becomes weaker, the price of gold and other precious metals increase.
Actually, you can buy almost the same amount of gas today with 1 oz of gold [$908 (1 oz. of gold) / $4 per gallon = 227 gallons of gas] as you could 4 years ago [$400 (1 oz. of gold) /$1.75 per gallon = 228 gallons]. In otherwords, 1 oz. of gold in 2004 and 2008 would have bought you the same amount of gas.
So I guess you can say the price of gas has not really increased. Basically, the value of the dollar has diminished by over 50%. Also, I highly recommend you watch the Lindsey Williams video on who controls oil and where its headed. It is not what you think.
Perhaps expensive gas will help solve the obesity epidemic. Seriously, people will probably be less likely to drive to a neighbor’s home or supermarket if they will have to spend $7 a gallon on gas. The result will be more walking and less driving.
Gas at $200 a barrel will have catastrophic consequences on US families, perhaps pushing us to a 3rd world status. An article I posted earlier suggests that what we know about oil and its limitless supply may not be entirely true. Also, what if you could run your car on water? Whatever the truth is- $200 /barrel will likely lead to the end of our economy as we know it. I doubt Obama or McCain can save us.
By Sambit Mohanty
SINGAPORE (Reuters) – JPMorgan Chase & Co will begin trading physical oil by year-end, increasing its exposure in a market that could rise to $200 a barrel, the bank’s global head of commodities said on Wednesday.
The bank plans to expand in commodities and energy trading, Blythe Masters said, despite expectations of job cuts in other areas as it prepares to take on staff from Bear Stearns at the same time it deals with turbulent financial markets.
“We will start trading in physical oil and refined products by the end of this year,” she told Reuters in an interview.
JPMorgan will join a growing list of investment banks from Goldman Sachs to Barclays Capital seeking to boost profits on their big derivatives trading desks by gaining a foothold in physical markets.
The third-largest U.S. bank added 50 people to its commodities and energy trading and investment team last year and is on track to hire a similar number this year, taking the strength of the total team globally to 450, Masters said…. read rest of story..
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