Data Worm Weekly - 16

My horoscope this week:
This is a high pressure week for the Aries Ram. You could have a list of must-do’s as long as your arm or out of nowhere people are making demands on you, albeit for the best of reasons. Thus, right from the get-go set your inner-motor to turbo-power and your attitude to laid-back. Impossible? Well, get your priorities straight and you won’t go far wrong. On the 21st Venus enters your sign bearing her Easter basket filled with love and positive developments – oh, and a surprise or two. While there is a chance of an unexpected romantic proposal it won’t take much to flip a previously stable alliance into free-fall. Take a deep breath and smell those fragrant blossoms.

Energy:
• Gas Prices:
The high gasoline prices are now costing the U.S. consumers about $360 million more per day at the pump than a year ago. According to AAA, six states now have gasoline prices above $4 a gallon, which is considered the price tolerance threshold for consumer behavior change. Read more
• Electricity Use:While most home appliances have become more efficient over the past 30 years, the average U.S. household uses many more consumer electronics — in particular, personal computers, televisions and related devices.

Markets:The Dow took a hiccup for the worse this week as the market absorbed the news from S&P regarding the United States' debt rating. Despite the downgrade Tuesday by Standard & Poor's, the Dow remained above 12,000, and bounced back quite handily on Wednesday. Meanwhile, commodities continued to make record-breaking gains. Gold broke into $1500 an ounce this week, and oil continues to remain well over $100 a barrel. Wheat and Corn show no sign of paring their gains of this year.

Oi.

National gas prices broke the three-dollar barrier this week, with average prices in Virginia holding just below that. Across the Commonwealth, price increases have been most extreme, over $0.50 increase per gallon in the last year, in Roanoke and the Newport News / Virginia Beach areas, but all areas are now just below three dollars a gallon, with Charlottesville and Richmond, traditionally the highest priced places to purchase gas in Virginia, holding below the three-dollar barrier.

I haven't purchased meat in a goodly while, and I was nearly rocked out of my seat to find that ground beef is coming in nearly $4 a pound for chuck. I mean, really?

The Monday Morning Report

Petrol:Gas Prices have held steady all month just above or below the $3 mark, though they certainly have crossed the barrier. Fifteen states maintained average prices at the pump below three dollars, though they have seen sharp upward trends. Thirty-five states, fully seventy percent, are over the three-dollar mark, bringing the national average for a gallon of regular gas at the pump today to $3.096.

Gas is most expensive in Alaska and Hawaii, as expected: both states have prices over $3.50. But in the contiguous states, California comes in priciest, with its $3.36 edging out New York by a penny. Gas is cheapest in Utah, but at $2.80 a gallon, I'm pretty certain no one is referring to it as "cheap gas." Granted, none of this approaches the five-dollar-a-gallon apocalypse foretold in July 2008, a fact for which I remain grateful. But keep an eye on this, as it not only eats away at your real earnings each week when you fuel up for the commute, but it also affects the prices of everything else from food to industry.

GrainSpeaking of food, grain prices have continued to rise

Brother can you spare a ride?

While the price at the pump continues to fall as a nationwide average, the reality in my little area of southwestern Virginia is that we are feeling the pain of gas shortages. It's not as bad here (yet) as it is in West Virginia, Ohio, Tennessee and the Carolinas, but given that my fair piece of the commonwealth resides at the crossroads of all these places, it certainly makes me wonder how David and I will be able to count on commuting. The shortage has hit hardest in Atlanta, Nashville, Tenn., and the Carolinas, including the Charlotte area and the mountain towns to the west. For days it has closed civic offices, cut short workdays and even canceled community college classes. Getting to work is not a small deal in the best of times for those of us in rural locations. And with the tidal wave of unemployment running around, David and I are lucky to have jobs. So perhaps it's time I asked my neighbor-down-the-road about carpooling, and asked a neighbor-up-the-road about meeting the bus after school. One thing is certain: if we are going to make it through this crisis, it's going to be because we have gotten more creative and pulled together as people. Now let's see if the government can be as flexible and committed to a solution.

Wrapping it up for August

Ethan takes his first stripe-test in karate today. Eddie, or Grand Master to the rest of us, has the students take a test each Friday on what they learned that week. Very cool. Good luck, Ethan, and congratulations on a great first week. The picture is a self-portrait taken in May. Heck of a good job on that, too. On the car front, the news isn't really as good. I found a smart car with a micro-hybrid drive, which gets 70+ mpg, but (of course) it's not available in the states. This makes me want to spend Thanksgiving in the UK (o the irony in that statement), buy the car while we are over there and ship it back. Frankly, it would likely still be more affordable than buying a smart car on the lot in the US, where price gouging is selling the 13 - 15K car for 18 - 24k. I'm all about opportunism, but there does come a point where business is driven elsewhere. And 70 mpg is a real consideration for me. Gasoline prices rose for the first time in more than a month, and while it wasn't a large increase as these things go (nine-tenths of a cent), it marks what is likely the end of the relief, such as it was. "Overall, gas prices have fallen off their highs in recent weeks. But prices at the pump are still 33% above the same time last year, when a gallon of gas cost $2.769." When David and I sit down and go over our budget for the coming year, we plan on seeing $4 gas again soon, and take into consideration the very real possibility of $5. While our incomes aren't stellar or anything, they are certainly considered a living wage. How do other families do this? Whatever their strategies or secrets, other families apparently are seeing the end of the relief as well: "Personal income fell in July by the biggest drop in 3 years after surging the prior two months". Overall, things aren't looking great for the coming few months. Speaking of the coming winter, it was cold and rainy this week. Thankfully, it will warm up a bit, but it is obviously autumnal warmth at that. I refuse to turn on the heat before Labor Day, and thus begins my annual battle to see just how long I can go before I break down and say sweatshirts and exercise are just not enough.

the point, again, please?

"article There was a gasoline-led rally, but now I think it's running out of puff. It seems to need constant bullish news at the moment to push it up," said Christopher Bellew, of Bache Commodities. "Everyone is talking about demand destruction."

article The White House on Wednesday made a new push for expanded offshore drilling to help lower fuel prices, days after new government data showed American petroleum product exports hit record levels. "The sooner Congress lifts the ban, the sooner we can get this oil from the ocean floor to your gas tank," Bush said. In May, U.S. oil companies shipped 183,000 barrels of gasoline a day out of the country, even as Americans saw prices at the pump steadily rise. U.S. exports of diesel fuel reached 444,000 barrels a day in May, a record for any month and four times higher than a year ago.

article The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, rose by 11,000 to 393,000 from 382,000 the week before. This was the highest reading since October 2005.

This measure has risen steadily as the U.S. housing slump chilled growth and crimped hiring.

The number of people remaining on the benefits roll after drawing an initial week of aid jumped 185,000 to a much more-than-forecast 3.282 million in the week ended July 19, the most recent week for which data is available.

article Year to date, demand for gasoline is still 2.23 percent weaker compared to the same period last year, MasterCard said. Prices for gasoline are up 37.2 percent since last year, when the national average price was $2.93 per gallon, according to MasterCard. A Reuters poll showed energy analysts forecast that the Energy Information Administration on Wednesday would report a small decrease in U.S. gasoline inventories due to a decline in production and imports.

article U.S. gasoline stocks fell by 3.5 million barrels last week, according to the U.S. Energy Information Administration, countering analyst calls for a 200,000-barrel build.

"The gasoline data showed a stronger demand than expected and support at $120 held, causing crude futures to rally," said Phil Flynn, analyst at Alaron Trading.

The EIA report also showed U.S. crude oil stocks dropped by 100,000 barrels, lower than analysts forecasts, while distillate stocks rose 2.4 million barrels, more than expected.

Additional support came from U.S. refinery problems, with BP cutting rates at its Texas City, Texas, plant due to mechanical problems. Top U.S. refiner Valero plans to cut gasoline production by an average of 330,000 barrels per day (bpd) in the third quarter at its 16 plants.

Who? Valero Energy Corporation (NYSE: VLO) is a Fortune 500 company based in San Antonio, Texas, with 21,836 employees and annual revenue of more than US$90 billion. The company owns and operates 17 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.3 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation's largest retail operators with more than 5,000 retail and branded wholesale outlets in the United States, Canada and the Caribbean under various brand names, including Valero, Diamond Shamrock, Ultramar, Shamrock and Beacon.

Meanwhile, Exxon Mobil made nearly $1,500 per second. Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter. That profit works out to $1,485.55 a second. That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

Face it: oil companies are more addicted to their record-breaking profit levels than Americans are to their oil. And, as the articles indicate, there is plenty of oil in production in the United States. Exports are up, production is down, and existing leases are unexplored. So, Mr. McCain, please explain to me one more time how expanded offshore drilling is supposed to help me? I seem to have missed something.

Why the fuss?

While we (David, the boys and I) were at my parents' house on Sunday evening, the price of gasoline came up, along with a bunch of other real-life price issues. I mentioned that I remember when there was an outrage when gas hit fifty cents a gallon. My mother laughed, saying that I had not been alive when gas was that low. [Actually, when I was born, gas was thirty-five cents a gallon¹, with many stations selling at far less in the gas wars. Minimum wage went up to $1.30 that year ² and a loaf of bread was twenty-five cents ³] While it might seem like ancient history, it is not, though I think the prices we are seeing today are with us to stay.

According to the AAA Fuel Gauge, the national average price for a gallon of regular gas today is $4.026. This is lower, but not really different from last month's average of $4.069. The gas prices in my area aren't far behind, having an average of $3.948 a gallon. Just a year ago, according to the AAA Fuel Gauge, that same gallon of gas was just above $2.68. Virginia was actually higher than the national average last year, with $2.824 a gallon. Back then we were all complaining loudly, decrying the effects and some even scoffing at the possibilities of three-dollars-a-gallon at the pump. Unemployment was 4.6 percent and minimum wage was $5.85.

Today, in accordance with the Fair Minimum Wage Act passed a year ago, the minimum wage is going up to $6.55. Even at last year's levels, that still leaves a full-time minimum wage earner below the poverty line. Given the real cost of energy and food these days, the increase has to be a beacon of hope in turbulent economic waters. I'm not expecting to see a reversal, but the reality is that this increase is likely going to help keep people from facing homelessness. The unemployment rate is up (5.2 percent for May 2008), the stock market is down, and the headlines on the front page of the financial section read like lyrics to a country song.