Gasoline Prices Tick Up
Gasoline prices have begun to tick up again, although only slightly. It may be only a coincidence that oil prices are rising too. The price for a gallon of regular nationwide was $3.406 yesterday, compared with $3.396 the day before and $3.381 a week ago, according to AAA. The increase does not make much sense. It is too early for gas prices to be affected by higher oil prices, which have not reached refineries yet. And inventory in the United States has been high recently. It could be that Americans are driving more now that gas prices have tumbled from just shy of $4. Or, stations may have tried to hold prices around $3.40 to maintain margins. Whatever the reason, the drop in gas prices is over for the time being.
Good News for Spain
The government of Spain received some good news. The country raised $3.6 billion in the capital markets, and rates fell sharply in the process. The yield on 12-month bills had an average interest rate of 3.9%, compared to 5.07% in the auction on June 19. Markets may believe that Spain is very close to a huge bailout that could be well over $100 billion, much of which will go directly to its hobbled banks. Rating agencies have not been kind to Spain recently, although the market has shrugged that off for now. Spain’s sovereign paper, the bonds of many of its states, and its major banks have all been downgraded in the past two weeks. Spain has delayed by a year the point at which it will reach its critical budget reduction goals. And unemployment remains above 24%. The markets have forgotten about much of that, at least for a day.
Douglas A. McIntyre
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