[lbo-talk] Oil prices rise yet again in US

[joanna bujes]

Some months ago, some Barron's pundit predicted it would go to 
$70.00/barrel. Well and good. I guess this is one of those 
intra-capitalist skirmishes. Is what's good for oil good for all? 
Obviously not: stokes inflation, destabilizes financial markets, and 
upsets civilians at their breakfast. We'll see.

Joanna

Doug Henwood wrote:


> Wojtek Sokolowski wrote:
>
>> More good news: $54.60 /barrel
>>
>> http://news.bbc.co.uk/2/hi/business/3744094.stm
>>
>> It is not too farfetched to think that it will be $3/gallon at the pump
>> after the election.
>
>
> A bit farfetched. A linear regression of retail gas prices on crude 
> oil prices (WTI) since 1985 suggests that we'd need $75 or $80 oil to 
> produce a $3 pump price. The "fair" price right now is around $2.15; 
> if $55 holds, it'd be $2.30. Every $5 increase in crude prices means a 
> $0.16 increase in gas.
>
> The formula is
>
>              gas/gal = .03211*oil/barrel + .54236  (r2=.74).
>
> Doug
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