FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
May 24, 2022

IN THIS ISSUE:

1. Gasoline Prices Hit New Record Highs 11 Straight Days

2. White House Tries To Blame Putin For High Gas Prices

3. A Little History On How This Newsletter Got Started

4. Do Yourself A Big Favor – Take A Speed-Reading Course

Gasoline Prices Hit New Record Highs 11 Straight Days

We’ve just experienced something which has never happened before. Gasoline prices have set a new record high 11 days in a row, according to AAA. This is unprecedented. The national average price for a gallon of gas was $4.59 on Friday, a slight increase from the day before and a new all-time record high.

Friday’s record high was almost 20 cents higher than the week before, nearly 50 cents higher than the month before and $1.55 more compared to the same time last year. So not only are prices at a new record high, the recent spike has happened faster than ever before.

All 50 states had a national retail price over $4 a gallon for the first time on Thursday, according to AAA, with Oklahoma offering the cheapest gas at $4.03 a gallon and California offering the most expensive gas with an average of $6.06. The chart below shows the gas price by state last week before the final few states saw average prices climb above $4 a gallon.

Speaking with Fox News last week, Andrew Gross, the national spokesman for AAA, Inc. warned that drivers should expect elevated gas prices throughout the summer, especially if the war in Ukraine rages on. While Gross did not predict when or at what level gas prices would peak, it was clear he believes gas prices have more room to rise.

Tighter supply and increased demand have pushed gas prices higher, Gross explained. "Typically, this time of year we are in a little bit of a lull. There is often a demand lull between spring break and Memorial Day and we had a little bit of it about two weeks ago, but then last week… there was actually an increase, which is very unusual.  I don’t think I’ve ever seen that." He added:

"You have this increased demand as well as these really elevated oil prices. The price of oil has been stuck in this weird range of $100 a barrel to $110 a barrel. It meets resistance when it hits $110 and then it drops back down, but then it meets resistance to drop below $100 and so it’s in this uncomfortably high area." He went on:

“Oil prices peaked above $130 per barrel in March due to anxiety about the disruption of supplies from Russia, the world's No. 2 exporter. To put it in perspective, back in August, a barrel of oil was about $64 so we’re $40 plus more and that’s putting a lot of upward pressure because oil accounts for about 60% of the cost of what you pay at the pump, so the more expensive the oil, the more expensive the gasoline." We all know that, of course.

White House Tries To Blame Putin For High Gas Prices

As you’ve no doubt noticed, President Biden does not like to take any blame for problems which arise. The White House has blamed Russian President Vladimir Putin for the record-high gas prices in the US, even coining the surge as the "#PutinPriceHike" and vowing that President Biden will do everything he can to shield Americans from "pain at the pump."

But we all know it was President Biden’s own actions in his first days in office which set this record price rise in motion. On his first day in office, he banned new exploration and drilling on federal lands. Gasoline prices were around $2.35 a gallon at the time. It soared above $3.00 by mid-2021 and now here we are at an all-time record of $4.59 and still rising.

With his approval ratings plunging to new all-time lows, Biden last month announced that the Environmental Protection Agency will allow the sale of E15 gasoline – gasoline that uses a 15% ethanol blend – across the country this summer. Biden has also moved to release 1 million barrels of oil per day from the Strategic Petroleum Reserve for the next 6 months – which is a bad idea and won’t reduce gas prices much if at all, as I explained last week.

The bottom line is, gas prices are likely to continue to rise through at least this summer. How high they will go is anybody’s guess. It remains to be seen if today’s record prices will change many Americans’ travel plans this summer, which are predicted to rise well above last year’s levels.

It also remains to be seen how much these soaring gas prices will impact the economy the rest of the year. Most all forecasters agree it will slow the economy; the only question is by how much. I’ll leave it there for today.

A Little History On How This Newsletter Got Started 

Editor’s Note: I’ve been writing this newsletter in one form or another for 44 years. Yes, I started it back in 1978 and I’ve continued it under one masthead or another ever since. It started out as a guide for my commodities customers – grain elevators, ag dealers, cotton gins, cattle feedlots, etc. – who I taught to use the futures markets to hedge their risks in the commodities they dealt in.

Prior to me coming along, these agricultural dealers in small towns across America paid big ag companies a pretty penny to do their hedging for them, if they hedged at all. Most didn’t understand how to hedge their risks using the futures markets, so they felt they had no choice but to pay the big ag companies a lot of money to do it for them.

I worked for one of those big ag companies and assisted these smaller firms with their hedging needs. I advised them how to do it, placed their orders in the futures markets and helped them manage the day-to-day risks in the commodities they dealt in. There were very few brokers in the commodity futures business who did what I did, so I quickly became a big producer.

I loved teaching agricultural dealers how to do their own hedging and stop paying large ag companies a small fortune to do it for them. I even wrote a detailed manual on how to do it around 1980 entitled “Hedging – Can You Afford Not To.” It was very popular.

By 1980, I had hundreds of customers. Even though I had two full-time Trading Assistants to help me, it was difficult to communicate with everybody. But with the clients saving so much money on their hedging costs, there were few if any complaints. In fact, my customers had me covered up with referrals.

With my client base growing so large, and including more than just agricultural commodity dealers, I decided to broaden the topic matter I would write about in the newsletter. I began to write about the economy, the individual markets (including stocks and bonds), investing in general – and before too long, even politics.

Actually, I got more feedback from readers on my political commentaries than I ever got on my hedging and commodities columns. I was not sure why in those early years but I seemed to attract far more conservative clients than liberal or moderate ones. The same is true today.

Do Yourself A Big Favor – Take A Speed-Reading Course

My job really consists of two things: reading and writing. I read a LOT of information every week, really every day. I take in a LOT of news daily from various sources. I don’t mind admitting it: I’m a news junkie.

Long-time clients and subscribers will recall that I am a speed reader. I actually took a semester-long class in speed reading back in college. I started out reading at 250 words per minute, which is about the national average still today.

After my speed-reading course, which I took very seriously, my reading speed increased dramatically to 2,500 words per minute on average and believe it or not, my comprehension actually improved as well.

I cannot describe in words how exciting it is to see your reading speed go up tenfold. Not everyone sees such dramatic improvement by taking a speed reading course, but as I said above, I took it very seriously and worked very hard at it. I still work at keeping my reading speed level high even today.

So, I would encourage everyone reading this to seriously consider a speed reading class. It really doesn’t matter how old you are. There are lots of speed-reading courses on the Internet. You can take them at home or you can go to one in a classroom setting (as I did). I prefer the classroom setting because they give you regular tests to measure how you’re doing.

However you chose to do it, I just highly encourage you to do it. It will only take a few months, and it will change your life forever. Imagine reading a whole novel in a couple of hours. Better yet, imagine reading something technical 8-10 times faster than you used to, and with improved comprehension.

And one final point: You are never too old to learn to speed read. Even if you are an older person, the ability to speed read will be a big advantage and immediately help you take in much more knowledge, regardless what subject you are looking into.

I firmly believe it is my high reading speed level which allows me to read enough material each week to keep this newsletter interesting. I must be doing something right to still have a large readership after 44 years of writing this thing.

Do yourself a huge favor and take a speed-reading course. It will not only boost your reading speed, it will also boost your self-esteem significantly. Don’t procrastinate – check it out today. You will thank me later!

Very best wishes,

Gary D. Halbert
President & CEO

SPECIAL ARTICLES

National Average Gas Prices - AAA

Gary's Between the Lines column: Americans Expect Inflation To Moderate – I Don’t See It

 

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