Why Gas Prices Will Go Back Up Part II

In December I posted a blog about why gas prices will go back up and it received numerous hits. The content of that post is now playing out.  Mark J. Perry just released some data of oil rigs being shutdown due to the drop in price of crude oil.  Here is what he found:

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US Oil Rigs Fell Last Week to 1,317, Down 292 and 18% from October Peak of 1,609

This is a quick reversal so I wouldn’t be surprised if 500 shutdowns happen before March. With production falling and the strength of the dollar in question, crude oil will eventually start rising.

Percent of Fuel Cost in Your Grocery Store Bill

With fuel prices dropping over the last several months, many shoppers are asking why food prices have not shown corresponding drops in prices. The asnwer may surprise you in how much fuel costs affect grocery store bills.

Annemarie Kuhns with the Agriculture Department’s Economic Research Service is reporting that only 4.7 cents of every dollar spent at the supermarket goes toward food transportation costs

So less than 5% of your bill is attributed to fuel costs.