Compare the volume in November 2020 to the volume of Crude Oil produced by the US in November 2021: 11.1M BRL/day in Nov 2020 vs 11.6M BRL/day in Nov 2021. I don’t see how that volume increase from 2020 to 2021 results in a spike in prices by itself. Current level is about identical to that of the Trump administration in 2018.
That’s the supply side. This far into the pandemic, is demand much higher now than in 2018? I’d think that demand has not fully recovered from 3 years ago but let’s assume it’s about the same. If the US is producing about the same amounts as in 2018 and demand has recovered back to the same levels, why are prices higher (about $2.50/gal in 2018)?
Looking back at Nov 2018, OPEC was producing 15% more Crude than now (although they are ramping up production slowly now). That seems enough of a squeeze on supply side IMO to explain the higher prices all other things being equal.
Is it price gouging? I think so but that’s basically the whole purpose of OPEC to create an anti-competitive production landscape to keep prices artificially high. No investigation really needed on their practices. They’ve been doing this forever which is why the US is thankfully not in that cartel of crooks.
Interesting that online prices are basically not that much higher than normal inflation levels. +3.5% vs. a very low inflation month around the peak of the pandemic does not seem out of line.
I’m wondering if it’s because of different supply chain for online sales or if it’s simply because much of the online purchases are not tied to gas or food.
Either way, that could explain some difference in perception between people shopping in stores primarily vs. those shopping online much more.
What a clown show over there. These in the space of 10 minutes this afternoon
WHITE HOUSE ECONOMIC ADVISER DEESE SAYS SHIPPING COSTS HAVE COME DOWN ABOUT 25 PCT IN THE PAST FEW WEEKS
WHITE HOUSE ECONOMIC ADVISER DEESE SAYS WILL NOT PREDICT WHETHER PRICE RISES WILL LAST THROUGH NEXT YEAR
WHITE HOUSE ECONOMIC ADVISER DEESE SAYS BIDEN HAS MADE CLEAR ALL OPTIONS SHOULD BE ON TABLE TO ADDRESS CHALLENGES IN ENERGY MARKET
U.S. OIL EXPORT BAN IS NOT ON TABLE AND NOT UNDER ACTIVE CONSIDERATION AT THIS TIME -PERSON FAMILIAR WITH BIDEN ADMINISTRATION’S THINKING
The shipping costs in question are a very specific route (from China to West Coast, off the highs), while most other routes remain elevated, and in any event that’s well over a month too late to impact any pricing this year and is a seasonal decline to be expected.
Uh, well you’re partially right, and so is whoever you quoted.
However, what they fail to mention is what you pointed out about it being a specific route from China to LA.
The missing tidbit of data is that the 25% shipping cost reduction is due to the ships only being allowed to make 75% of the trek. They then have to drop a mile of anchor and wait in line to get to the port.
The energy part in that chart is known and clear. It’s in lock-step with the Crude and Natural Gas price increases. Expected and explanable. The re-opening part seems a bit random. Looks like an initial surge in late Spring then kinda random up and down. To me that looks like impact of re-opening is largely done and we have random seasonal adjustments now.
But the non-reopening components is growing slowly and steadily. That’s troubling because it’s not as easy to tackle as the other causes. In this case, I’m thinking this is the growing impact of supply chain issues (especially shipping but also distribution within the US) and shortages to demand unmet by supplies. That last part won’t go away until supply chain issues are resolved and it’s not looking that promising for a resolution soon.
I deliberately left out forex effects. If anything this year has not seen a weakening of the USD despite all the COVID stimulus money being thrown around in 2020 and 2021. As high as inflation is lately, if forex had been unfavorable, it could have been worse.
That’s an interesting graph but really two different worlds. Previously there was a free market where private investors would buy bonds based on a reasonable coupon rate.
Now the Federal Reserve has essentially socialized the treasury market. They are buying up a lot of the issuance and manipulating interest rates. The bond market buys based on the expectation of front running the Federal Reserve.
The largest owners of nationwide single family rentals are reporting 17% YoY rent increases. OER is 30% of the Core CPI calculation and 24% of reported CPI. Using the more empirical measure in the calculation increases today’s Core CPI from 4.9% to 9.0% and CPI from 6.8% to 10.1%
