Diesel Fuel Prices and Gas Prices sure to Crash Through $4 a Gallon?

It’s the beginning of February and its 68 degrees in the Philadelphia, PA part of the country. To say we have had a mild winter so far would be a big understatement. Crude inventories are up, gas inventories are up, diesel fuel & heating oil supplies are down very slightly so what makes people believe there is only one way for prices to go and that is up.

Listen this economy has not been pretty for a long time, so it could be people have negative thoughts about a lot of things and gas prices and diesel fuel prices are part of those thoughts.

Analysts at GasBuddy expect 2012 to be a record-breaking year for price in 16 of the nation’s top 20 markets. In an election year others believe that there is no way the current President would allow for this to happen. Does he have any real control in a free market to help determine his countries fuel management? Unlikely at best.

In the Middle East, Iran keeps trying to show its power by continuing to threaten to shut down the Strait of Hormuz, an oil passage way that helps process one-fifth of worldwide oil. I say, Iran should shut it down. Let’s see how long that will really last. I think the threat of these things is sometimes more scary to people than the reality. Look at Libya last year. Diesel fuel prices went up because of tiny Libya and the little amount of oil it produces, it was going to cause all kinds of effects for years. Not so. Libya is up and producing as much oil now as ever.

The reason we should worry about higher diesel fuel prices and gas prices is simple. It’s the economies. Not just ours, China’s and Europe’s but by in large the World economy has not been in the right gear for a few years.

That is about to end. Yes, call me a positive person that these economies are going to get rolling but that is the way it looks to me. The stock market is off to a strong start. Corporate earnings for companies are still coming in strong and I just think it’s about dam time we had some good news.

The bad news is when the economies are rolling again, there will be a lot tighter supply of fleet fuels, especially diesel fuel. With that will come a price increase. Hopefully, the increase in diesel fuel prices will be well off set by increase in the overall economy.

Let’s see what happens.