Feds send oil, gas prices higher via QE3

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PostPosted: Sat Sep 15, 2012 3:10 am
Feds send oil, gas prices higher via QE3
Posted in: Gas Prices, by Patrick DeHaan on Sep 14, 2012 03:14 PM

Read more at http://blog.gasbuddy.com/posts/Feds-sen ... A7tamPY.99

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Fed Chairman Ben Bernanke

Just when we were all hoping for some relief at the gas station this autumn, the Federal Reserve announced its third round of quantitative easing, weakening the dollar and sending oil prices higher- gasoline is sure to follow.

The program, dubbed QE3, works like this: the U.S. central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions with newly created money. In turn, this sends the value of the U.S. dollar lower, the global currency of crude oil, thus making oil more expensive to buyers holding American Dollars.

We're seeing oil prices tinker on triple digits as a result, and it may not get a whole lot better. Since QE3 is expected to keep the dollar weak, it may keep oil prices elevated, and thus oil and gasoline prices high. As the economy has weakened during Obama's presidency, the Fed has continued its loose monetary policy, keeping the dollar weak thus oil prices strong, since oil is globally traded in dollars. Essentially, this makes oil more attractive to use as a hedge against inflation, and makes oil cheaper for countries holding stronger currency against the dollar.

The trickle down is that prices at the pump may not fall as quickly, nor as much as earlier expected. Why? We're still dealing with the slow increase of production from the fallout from Isaac, and now the Fed is beating the strength of the dollar. It's a recipe for high gasoline prices, and September may close out as the most expensive September at the pump in history-- and it's not over yet!



Thanks Obama! :roll:
"If you ain't on the road, you ain't makin' money!" - gregster

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PostPosted: Sat Sep 15, 2012 3:13 am
Oil Prices Climb As Middle East Tensions Intensify

http://www.foxbusiness.com/markets/2012 ... intensify/

By Sara Sjolin

Published September 14, 2012

MarketWatch Pulse
LONDON – Crude-oil futures continued to rise in electronic trade on Friday, as concerns over unrest in the Middle East intensified. Oil futures for October delivery rose $1.19, or 1.2%, to $99.50 a barrel in European trading hours, adding to a 1.3% gain from Thursday, when the U.S. Federal Reserve said it would launch a third round of quantitative easing. Violence in the Middle East and North Africa pushed oil prices higher, with concerns that this week's unrest will disrupt oil supply. On Thursday, protesters attempted to storm the grounds of the U.S. embassy in Yemen.


Thanks Obama! :roll:
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PostPosted: Sat Sep 15, 2012 3:21 am
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Costs Rise at Fastest Pace in 3 Years

http://www.nytimes.com/2012/09/15/busin ... .html?_r=0

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A welder at Southern Tank and Manufacturing in Owensboro, Ky. Production at United States factories, mines and utilities dropped by 1.2 percent

By REUTERS
Published: September 14, 2012

An increase in the cost of gasoline pushed consumer prices up in August at the fastest pace in more than three years and squeezed spending on other items, threatening to further slow the already sluggish United States economy.

At the same time, production at the nation’s factories, mines and utilities dropped by 1.2 percent, the biggest decline since March 2009, other data on Friday showed.

The sour mix of numbers was tempered by an unexpected increase in consumer sentiment in early September and signs that underlying inflation pressures remained contained.

With gasoline costs increasing, service stations chalked up healthy receipts. A second report from the Commerce Department showed sales at gasoline stations shot up 5.5 percent last month, helping to push overall retail sales up 0.9 percent, the biggest gain in retail sales since February.

Economists said the reports helped justify the Federal Reserve’s decision on Thursday to introduce a third round of bond purchases to try to lower borrowing costs and spur growth.

“It’s very clear the economy is soft and it doesn’t look like there is any real underlying inflation pressures the Fed needs to worry about, so they are going to keep their foot on the gas for a long time,” said Jeremy Lawson, a senior economist at BNP Paribas in New York.

The Consumer Price Index increased 0.6 percent last month, the first increase in five months and the biggest gain since June 2009, the Labor Department said. Gasoline prices, which also rose the most since June 2009, accounted for about 80 percent of the rise.

Sales of automobiles and building and garden equipment were also strong, but sales elsewhere were weak. A gauge that tracks the consumer spending component of the government’s gross domestic product actually fell 0.1 percent.

That and the strong C.P.I. number left most economists anticipating modest gains in growth of the G.D.P. in the third quarter after output increased at an annual pace of 1.7 percent in the April-to-June period, well below the 2.5 percent rate that is needed to keep unemployment steady.

“For overall G.D.P. in third quarter, we now see some modest downside risk to our current call for a 1.5 percent growth rate,” said Michael Feroli, an economist at JPMorgan in New York.

While the Consumer Price Index rose sharply, the so-called core index, which strips out volatile and food and energy costs, edged up just 0.1 percent for a second consecutive month.

In the 12 months through August, overall consumer prices increased 1.7 percent, staying below the Fed’s 2 percent target, but advancing from July’s 1.4 percent rise.

Food costs rose only marginally in August, but they were expected to rise significantly later this year as the impact of a severe drought, which caused a spike in corn and soybean prices, worked its way through to the supermarket.


Also Friday, data on business inventories showed stocks of unsold vehicles piling up in July.

A plunge in auto production contributed to the drop in industrial output in August, although Hurricane Isaac, which disrupted oil refineries in the Gulf Coast, was also a factor.

“Even though an unwinding of these special factors will likely buoy industrial production in September, we do not look for much improvement in underlying manufacturing production trends at this point,” said John Ryding, chief economist at RDQ Economics in New York.


Thanks Obama! :roll:
"If you ain't on the road, you ain't makin' money!" - gregster

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PostPosted: Mon Sep 17, 2012 11:14 am
more like thanks corrupt washington officials and assholes that run the country.

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