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GasBuddy News Article

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High Oil Prices Are a Bigger Problem Than You Realize

businessinsider.com -- There is ample evidence that spikes in oil prices leads to recession, at least in the US, which is an oil-importing nation. James Hamilton has shown that 10 out of the last 11 US recessions were associated with oil price spikes. How does this happen? An analogy can perhaps help explain the situation. This analogy also sheds light on a number of related economic mysteries:

How can oil have a far greater impact on the world economy than its share of the world GDP would suggest? After all, BP’s World Energy Outlook to 2030 shows the world cost of oil is only a little over 4% of world GDP.

How can high oil prices continue to act as a “drag” on the economy, long after the initial spike is past?

Why isn’t a service economy insulated from the problems of high oil prices? After all, its


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Submitted Feb 01, 2013 By: teafortwo
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honda0105
Champion Author Tallahassee

Posts:22,891
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Message Posted: Feb 4, 2013 5:00:14 AM

Reeeeeaaaallly??? Whoddathunk that?
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blueliner16
Champion Author Detroit

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Message Posted: Feb 3, 2013 6:30:20 AM

Agreed, tomok.
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tomok
Champion Author Portland

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Message Posted: Feb 2, 2013 9:29:00 PM

High Oil Prices Are a Bigger Problem Than You Realize! Lower fuel prices would help this very bad economy recover just a little faster but that will not likely happen very soon.
Big Oil and Big Gas sells fuel and natural gas on the world market for higher prices to other countries. 'Coming out of the closet' Sneeky's lousy, smoke and mirrors, lack of jobs, dog and pony show and in the crapper economy, the jobs are Not here. Sneeky's economy is not improving but continues to hurt the population and the job numbers continue to be down and NOT improving!
The US ‘oil and natural gas resources’ belong to the citizens of this country and are to be used by those same citizens! The price at the pump needs to go down to $2/gallon - *$3, *$3.50/gallon or *$4.00 is Not the new low!
More Refineries are Not the answer, Stop exporting fuel is! Take care of the domestic fuel market first and above all else!
Vehicle manufactures Produce and the population ‘Drives’ vehicles with high MPG, are very safe, reliable, have a ‘reasonable’ cost and a good ‘value’ for the money.
The price of fuel at the pump is too high!
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nb52
Champion Author Grand Rapids

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Message Posted: Feb 2, 2013 8:16:23 PM

Our Maximum Leader will fix ti all....soon.
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dcoxdcox44
All-Star Author New Hampshire

Posts:988
Points:548,060
Joined:Aug 2011
Message Posted: Feb 2, 2013 9:27:53 AM

don't like the prices?
do something - figure out how to use less!

use public transportation
carpool
get a job closer to home
get a home closer to work
ride a bike
get ride of the Chevy Subdivision
(oh you need to haul your 6 kids around? Should've thought about that earlier)
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the1roadhog
Champion Author Atlanta

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Message Posted: Feb 2, 2013 6:52:52 AM

High oil prices and joblessness did nothing to prevent a second term for the current Prez so voters are getting what they voted for in the majority of folks which do not include me.
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wild3bill
Champion Author New York

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Message Posted: Feb 2, 2013 6:23:36 AM

People who work for the Diamond Monopoly Do not VACATION in the US.If it appeared Cartel work was being done on US soil the Monopoly or Cartel employee could face serious US Federal prison time!
One Hundred Years ago TheBig Oil Monopoly was broken up under Tgheodore Roosevelt. Thr reunification of former parts of the Standarf Oil Monopoly i.e. Exxon and Mobil was the beginning of out of control oil price manipulation and High Oil Prices of the last 15 to 20 years!.The FTC official who green lighted Big Oil re- Merger saying it would not lead to the price gouging we have had for fifteen years!He shoyuld have got Fredral Prison time!
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Focus2
Champion Author Illinois

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Message Posted: Feb 2, 2013 12:27:35 AM

Oil plays a special role, because it is easily transported, and can be used in many situation where electricity or some other form of energy (such as human energy, wind energy, or natural gas) would not do."The above statement while true, they fail to mention that Big Energy is excited about all the natural gas finds from fracturing shale and rock. Big Energy is trying to get our government to allow them to export our natural gas to the rest of the world. They plan to liquify the natural gas for export. Cheniere Energy already can do this and has received an okay to export with others trying to get on board. They are even resorting to e-mails to the public to call congress and convince them that it is best thing for us and will create jobs etc. The real truth is, it will profit Big Energy, establish world demand market and pricing. Natural gas will rise in the USA from these actions. We need to keep our natural gas here and not be allowed for exports. It will be clean cheaper energy for consumers and business. Business that have left will have an incentive to return to America with the promise of clean affordable energy.
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endymion
Champion Author New York

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Message Posted: Feb 2, 2013 12:08:43 AM

the producers cut supply to maintain prices and keep it in line with demand, or cut it to drive prices up.
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Focus2
Champion Author Illinois

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Message Posted: Feb 1, 2013 11:43:08 PM

Ever think about the diamond industry? More and more diamonds are mined and put on the market but the price is always controlled and manipulated. You will never see cheap diamonds.
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boatfloyd
Champion Author Jacksonville

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Message Posted: Feb 1, 2013 11:30:15 PM

With all the oil being discovered in the United States and other parts of the world, won't this level off oils and gas prices. So even though prices won't go down, they will just keep up with inflation.
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Wsamson7121
Champion Author San Jose

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Message Posted: Feb 1, 2013 11:23:55 PM

Nemo is right in that we can thank our dear leader for cancelling the keystone pipe line. Not looking to 4 more bad years.
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granitestater
Champion Author New Hampshire

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Message Posted: Feb 1, 2013 11:12:18 PM

Wind, water, wood and coal fueled the Industrial Revolution. Oil did it all by itself...
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Beboper
Champion Author Virginia

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Message Posted: Feb 1, 2013 11:05:08 PM

old news
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Steve6921
Veteran Author New Hampshire

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Message Posted: Feb 1, 2013 11:03:48 PM

4 more years
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cheaper0ON
Champion Author Ontario

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Message Posted: Feb 1, 2013 11:03:46 PM

Old News.
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CdnLynx
Champion Author Ontario

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Message Posted: Feb 1, 2013 11:03:32 PM

Recession? Personally I'm depressed! let's call a spade, a spade! Let's call it a depression! ;-)
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JagXKR
Champion Author British Columbia

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Message Posted: Feb 1, 2013 11:02:27 PM

High energy costs will always stifle or delay an economic recovery.
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NemoIL
Champion Author Illinois

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Message Posted: Feb 1, 2013 10:59:09 PM

We can thank our dear leader for cancelling the keystone pipe line for helping to increase oil prices here.
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DustyHorse
Champion Author Virginia

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Message Posted: Feb 1, 2013 10:57:18 PM

There will be another big dip in the ongoing recession.
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granitestater
Champion Author New Hampshire

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Message Posted: Feb 1, 2013 10:55:40 PM

The Obama administration. Turning the economy into a cesspool since 2008...
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TheSnowstorm
Champion Author Montreal

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Message Posted: Feb 1, 2013 10:54:27 PM

Simply because oil is one of the few commodities that is intricately intertwined to so many other products and services, both directly and indirectly.
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MDTDriver
Champion Author California

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Message Posted: Feb 1, 2013 10:47:15 PM

Recession is comming before the end of 2013
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SparkieMi
Champion Author Kalamazoo

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Message Posted: Feb 1, 2013 10:46:33 PM

The very good post by suzmar hits the nail on the head!!!
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mstearno
Champion Author Dayton

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Message Posted: Feb 1, 2013 10:45:27 PM

I Realize how bad
and our president doesn't care nor understand
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TheHermit
Champion Author Maine

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Message Posted: Feb 1, 2013 10:43:32 PM

So, the outlook is bad?
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OU8121959
Champion Author Grand Rapids

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Message Posted: Feb 1, 2013 10:43:31 PM

really
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Buddy2264
Champion Author Tampa

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Message Posted: Feb 1, 2013 10:43:14 PM

1/2 of what we import we refine and then ship back out as finished fuels it seems by some reports on here in the past. Now with new US oil production we will continue to ship out more fuels, leaving our inventory low and prices high if we do not do something or switch to other fuels and energy.
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SavALot
Champion Author Virginia Beach

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Message Posted: Feb 1, 2013 10:43:02 PM

lots of misconceptions with oil prices
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1Casey
Champion Author Albany

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Message Posted: Feb 1, 2013 10:42:36 PM

?
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johton
Champion Author Seattle

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Message Posted: Feb 1, 2013 10:42:15 PM

Yes, really big problem. Less money in my pocket.
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Beaveronparade
Champion Author Hartford

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Message Posted: Feb 1, 2013 10:42:11 PM

We know how big of a problem it is unfortunately. We are paying the price at the pumps.
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Rednix
Champion Author Miami

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Message Posted: Feb 1, 2013 10:40:17 PM

They need to start pulling on the reins for these oil price increases.
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rrs517
Champion Author Colorado

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Message Posted: Feb 1, 2013 10:39:22 PM

Obama and his Energy Czar want to see $7.00 gas and have said so. So what's the surprise?
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snerd
All-Star Author Pennsylvania

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Message Posted: Feb 1, 2013 10:36:43 PM

No kidding...
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Spankster85
Champion Author Chicago

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Message Posted: Feb 1, 2013 10:35:17 PM

It's a big problem, we get it.
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fowlcan
Champion Author Oklahoma City

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Message Posted: Feb 1, 2013 10:33:58 PM

High prices are a big problem to everyone.
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bvrbill
Champion Author Eugene

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Message Posted: Feb 1, 2013 10:33:49 PM

Not good news.
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tidalwave3
Champion Author Tallahassee

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Message Posted: Feb 1, 2013 10:33:46 PM

Sounds right :(
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wshutton
Champion Author Albuquerque

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Message Posted: Feb 1, 2013 10:31:47 PM

They are not a problem for Republican speculators.
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suzmar
Champion Author Texas

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Message Posted: Feb 1, 2013 10:31:24 PM

No, I think everyone except the Obama administrations realizes that high Oil prices are a problem.
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BBHybrid
Champion Author Pittsburgh

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Message Posted: Feb 1, 2013 10:29:05 PM

i realize but nothing is changing
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esquared
Champion Author Oklahoma City

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Message Posted: Feb 1, 2013 10:28:40 PM

Interesting analogies, none of which actually explain the relationship between recessions and the price of petroleum.
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unemployed58
Veteran Author Montreal

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Message Posted: Feb 1, 2013 10:28:33 PM

why is everything Obama's fault....I mean c'mon, think about it!!
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bginsj
Champion Author San Jose

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Message Posted: Feb 1, 2013 10:25:44 PM

now as in the past we are putting more money into our gas tanks and not spending in other places!
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BREW9
Champion Author Tampa

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Message Posted: Feb 1, 2013 10:24:11 PM

squeezing us
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Dragnet
Champion Author Arizona

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Message Posted: Feb 1, 2013 10:13:59 PM

Gas will bankrupt the American public and Obummer could care less as long as his brotherhood makes out like kings
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wayoung56
Champion Author Alabama

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Message Posted: Feb 1, 2013 10:12:12 PM

Good one drz614!!!
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NHLiveFree
Champion Author New Hampshire

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Message Posted: Feb 1, 2013 10:11:37 PM


How is life in Venezuela drz614?

Big Oil has repeatedly played the role of the tail wagging the dog over the last century. A role its monopolists and CEOs have always relished from their view on Mount Olympus.
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my2002m
Champion Author Tulsa

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Message Posted: Feb 1, 2013 10:07:30 PM

They can put us into another recession.
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