Lakewood OH
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Comings to the world’s financial markets: Speculate this

When gas prices went up 20 cents in a day two weeks ago, I got to thinking.

I thought to myself, “Self, why do I think about it?”

I commute 25 miles to work, that would be the first reason. The second is that every one of my writers also commutes. That’s an occupational hazard to be sure as we have one office for three newspapers serving 10 cities, including five in the Westshore.

In the information age, I stress to each that he or she should not feel compelled to come into the office every day of the week. There are a couple of days during which production demands of the print product make the drive a necessity, but that’s it.

Some days it could make sense to make calls from home. Some days it could make sense to go to a meeting, but not come into the office. As for sports writers, they are another breed altogether.

You get it, there are more than a few variations on work schedules.

A 20-cent increase (from $3.45 per gallon) means a $2.50 increase (to $37) in cost to fill a 10-gallon tank. Predictions of $4.50 gasoline (a roughly 80-cent increase per gallon from the mark two weeks ago) means it would cost $45 to fill that same tank.

That $10-or-so price differential is equal to three boxes of Girl Scout cookies my youngest was just selling. Guess I’m glad those sales happened when they did.

And, it’s a good thing the cost of living is going down in other areas.

Oh wait …

McClatchy News Service reports convince me what is largely at work is speculation among investors about tensions in the Middle East. It would be a question to ask someone if investors still build in premiums for possible interruptions during the hurricane season – which does not start yet for another three months.

They are worrying about the supply side of the equation.

On the demand side, AP reports show split indications that oil use in the United States “dropped every week from March 25, 2011, to Feb. 17, 2012,”and that oil demand in China is up.

We are subjects of a world market and – speculate this – juicing the market prices like this will only accelerate changes away from our dependence on oil, even while production in this country seems to be headed up.

How do folks in the Westshore make this situation work? I’d like to hear. I’d like to share those stories. Do you work in information technology? or local retail? Do you carpool? Fix your own vehicle? Use a motorcycle? or a bicycle? E-mail me by way of editor@2presspapers.com.

Oh, and one more thing. I don’t believe local stations should be exempt from observation when it comes to pricing, but I don’t blame local owners by and large. I put in a call to an old contact, Mark Griffin, president of the Michigan Petroleum Association who reminded me of a break-even equation with which local owners are faced: wholesale price + taxes + overhead = breakeven. Griffin did his best to put me in touch with people who could cite Ohio numbers for those, but using Michigan’s for the day we spoke is telling nonetheless: $3.05 (cost per gallon wholesale on Feb. 24) + .57 (federal and state taxes) + .20 (freight, labor, credit card fees and operational overhead) = $3.82 (the minimum amount stations would have to charge to break even). Stations that day were selling in the range of $3.69 per gallon.

 

 

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