“Dude, gas is just one thirty-eight! Dude, we’re gonna love Europe!”
The energy crisis more and more resembles a nightmarishly Frank Kafka’s novel. In Panama, every 15 days we have to go through the anxiety of finding out what the new gasoline prices will be for the next two weeks. Government officials make all kinds of esoteric math calculations to reach what they call the “Parity Gasoline Prices”.
These are the gasoline prices for the next two weeks as posted by an Esso gasoline station a few blocks from my house:
- 95 Octane Gasoline: $4.51 per gallon
- 91 Octane Gasoline: $4.36 per gallon
- Light Diesel Oil: $4.52 per gallon
It’s interesting to see that the price of light diesel is higher than either premium or regular gasoline. Diesel is used to fuel most industrial vehicles, trucks, trains and ships, and its increase is a large part of the reason food and consumer goods prices are rising, putting additional pressure on consumers already paying $4 and more for gas. Yes, reality is becoming more frightening than a Kafka novel.
Do we anticipate cheaper gas prices in the near future? I don’t think so. Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude’s stratospheric rise, will extend its decline and add to oil’s appeal.
Retail gas prices are likely to resume their own trek into record territory now that oil futures have broken out of the trading range where they had been for nearly 3 weeks.
Light, sweet crude for August delivery rose as high as $142.99 a barrel on the New York Mercantile Exchange before pulling back sharply in a spate of late—day profit-taking to settle up 57 cents at a record $140.21. On Thursday, the contract shot past $140 and rose more than $5 to a new settlement record. The crude oil price forecast was $140.54 a barrel as of 10:26 a.m. this morning, up $0.33 – 0.23 percent.
The stock market’s recent black out is also sending investors in search of higher-yielding investments. On Thursday, the Dow Jones industrial average fell nearly 360 points, and in afternoon trading Friday was down more than 100 points.
World stocks fell to a three-month low as a fast deteriorating global inflation picture fanned concerns over the outlook for corporate profits, hastening the rush of investors’ funds into commodities.
“When money has nowhere to go, it is parked in commodities as it is one of the few investment instruments that actually rises the more money you pour into it,” said Oliver Jakob, an analyst at Petromatrix Gmbh, in Switzerland in a note.
With oil over $140 a barrel, traders are now expecting to see $145 and even $150, analysts say. OPEC President Chakib Khelil’s comments that prices could reach $170 a barrel in the coming months, also fueled the rally. “I forecast prices probably between $150 and $170 during this summer. That will perhaps ease towards the end of the year,” he told France 24 television.
With this scenario in mind, a bicycle or horse and buggy is becoming an attractive investment. Au revoir!
