Sunday, February 24, 2013: 6:30PM: Wholesale prices rose 6 cents on Friday, while retail prices (in Standale) fell by a dime. I calculate a price to retailers of $3.77 right now, and since that is a typical price in the area, we need to go on price hike alert. New price coming in the next day or two: $3.95-$3.99.
Now, people have been asking me why gas has gone from nearly $3 at the beginning of the year to almost $4, and it is still February. I think the answer is the same one we’ve been talking about for years: the stock market has shot higher in 2013, and when that happens, gas prices follow. Why? Because commodities like oil, gold, etc. have been “securitized” in the past decade, making it easier for speculators to buy and sell them through ETFs with symbols such as GLD (gold) and UGA (gasoline). This leads to demand for these commodities that are not because people want to use these things, but because they basically want to hoard them with the expectation to sell at a later date at a higher price. Congress does not appear interested in fixing these markets, so if you worry about gas prices, then keep an eye on the Dow. –Ed Aboufadel