Long and Variable Effects from Gas

As if most Americans did not have enough to worry about these days, the risk of a fast and furious spike in gasoline prices beyond what we have already seen is easily one of the biggest risks in the coming weeks from the Iran escalation. 

First and foremost, this is not merely a knee-jerk headline chasing move in the energy pits, since we know both crude oil and gasoline (the latter on the UGA ETF monthly chart, second below) have been coiling for literally years and have been ripe to breakout when they were good and ready. 

The graph, immediately below, is from the GasBuddy.com website and illustrates up-to-date average gas prices across the country. 

While we are seeing initial surges, I suspect it will not wreak absolute havoc until we get closer to $3.50 in many parts of the country. While that may seem hyperbolic I still maintain there is a ton of complacency surrounding both the technical breakouts in oil and gasoline as well as the general Iranian conflict. Even equities are trying their best to be nonchalant with a reasonably orderly pullback today. 

However, the longer this conflict drags on with no actual signs of imminent resolution the more reality should start to set in that these breakouts are serious and, ultimately, will be too much for most Americans to stomach when they were already getting squeezed in almost every other aspect of the economy.