Thursday, June 23, 2011 9:01:26 PM
just for grins i've compared historical retail gasoline prices (left axis), WTI crude, and the S&P 500 (divided by 100)
unsurprisingly gas prices are correlative with crude prices with occasional deviations due to things like Katrina and Rita. Conversely, the S&P and the other major indices are poorly correlated with the price of crude although major changes in crude prices seem to lag changes in the index. Also note that oil and gas prices have been declining since the end of April. The Chinese economy seems to be slowing, not heating up. Releasing US strategic reserves does nothing for European refineries (where Libyan oil goes). So Obama and friends' reasons for releasing oil into an already over-supplied market seem spurious.
On the sort of positive side, the US gov't might actually makes some money out of this deal (wondering whether this was really done to weasel around the debt ceiling problem).
unsurprisingly gas prices are correlative with crude prices with occasional deviations due to things like Katrina and Rita. Conversely, the S&P and the other major indices are poorly correlated with the price of crude although major changes in crude prices seem to lag changes in the index. Also note that oil and gas prices have been declining since the end of April. The Chinese economy seems to be slowing, not heating up. Releasing US strategic reserves does nothing for European refineries (where Libyan oil goes). So Obama and friends' reasons for releasing oil into an already over-supplied market seem spurious.
On the sort of positive side, the US gov't might actually makes some money out of this deal (wondering whether this was really done to weasel around the debt ceiling problem).
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