The Futures Market in one graph

May be an image of text that says '2.81 U.S. AVERAGE GASOLINE PRICE Regular Grade, $/Gallon 2.71 2.60 2.81 2.49 2.71 2.38 2.60 2.28 2.49 2.17 2.38 2.06 2.28 1.95 2.17 1.85 Election 2.06 1.74 1.95 7/27 8/15 9/3 2020 1.85 1.74 9/22 10/11 10/29 11/13 12/6 12/25 1/13 2/1 2/20 3/10 2021 Unbiased'

11 thoughts on “The Futures Market in one graph

  1. It would be interesting to know what you think this graph proves?

    That the markets expect a robust recovery?
    Ever since Trump lost, all markets have been going up. The Dow was at 27,000 the day before the election. Today it is at 32,778. Markets are about CONFIDENCE.

    Or maybe that Texas will never gets its act together? The recent increases are related to Texas’s power issues.

    Or, simply that the pandemic is nearly over and prices are returning to past levels? There were many months before the pandemic when gasoline prices were higher than the futures prices on the graph.

    Liked by 1 person

    1. The futures market is driven by anticipated prices.

      As soon as Biden was elected, they started betting on reduced domestic supply and increased Social Cost of Carbon values.

      If the Social Cost of Carbon were accurately calculated, with the benefits of fossil fuel use offsetting presumed costs, it would be a negative number, but Biden reinstated Obama’s $51/ton price with no basis. The SSC at the end of Trump’s term was under $10.

      So, bet on higher gas prices, probably $4 er gallon by fall.

      Like

      1. Uh, the idea that the Social Cost of Carbon is what is causing the increase in gasoline futures and NOT a return of economic vitality is quite a stretch. The SCC is used in evaluating policy alternatives and until Trump came along it was evidence based. His cancelling of the science has been uncancelled. Nothing more.

        Your idea that SCC should be negative and thus encourage policies favoring the burning of fossil fuel is not widely shared by professionals in the field. They would say you do not put enough weight on environmental damage and health impacts of carbon pollution.

        Gasoline prices above $4.00 AGAIN are possible – we have been there before.

        https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPM0U_PTE_NUS_DPG&f=W

        However, the movement toward central power station energy for automobiles and the return of achievable MPG goals will be working against that even in a more robust economy.

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      2. The market prices are going up because of OPEC not ramping up production because they lost so many dollars during 2020.

        It has been said numerous times: Presidents have NOTHING to do with markets. Prices go up and down based on market forces. If the major producers keep production down by choice there is little to nothing any president (T**** or Biden, or any of the predecessors) can do about it.

        Liked by 1 person

          1. And OPEC has kept production levels low. Explain how Biden has NAYHTING to do with OPEC’s decisions?

            And in the same vein, why aren’t you touting the rise in the stock market sine the inauguration? It has surpassed the levels during T****’s years. T**** even tied his economic greatness to how well the stock market was doing on his watch.

            You want it both was, but you can’t have that.

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          2. And the economic aid package was also a non-starter for the market?
            HAHAHAHAHA!

            Your ideas that only the vaccine rollout, which was not exactly smooth under T**** was the ONLY driving force is delusional with a capital BS.

            Like

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