Gas Prices Again...

Well, it seems the rich and powerful are busy ripping off the American consumer again. I guess they figure that there is so much attention being paid to the Obama administration and what they are doing, nobody will notice that we are being ripped off by the oil companies/speculators/refiners/wall street/gas stations, we don’t even know who all is involved in it.

I’m talking about the rising price of gasoline at the pump. There is no natural market activity that can account for this increase because the barrel price of oil has dropped and except for a couple of temporary hiccups in the market, has stayed low.

The last time we were in the neighborhood of the barrel price of oil being at $40 per barrel was back in late 2004. At that time the barrel price was climbing drastically toward $40 per barrel and the worry at the time was that gas would top $2 per gallon at the pump. Unlike today, demand was rising and surpluses were low so the fact that the barrel price being pushed OVER $40 caused pump prices to hit $2 per gallon was understandable.

Today however, demand is low and falling, surpluses are high, storage is maxed out and there is in effect a glut of oil, but the pump prices are rising. This is just the opposite that it should be doing if it was controlled simply by supply and demand like it should be.

The only logical conclusion then, is that the market is being artificially manipulated. The general consensus is that the oil refineries in this country are cutting back their production to limit the supply and drive up the price. But who is controlling all of the refineries? Who is making these decisions and why are they all complying? Are they in collusion to control the market? Are the oil companies still raking in record profits? Yes they are.

It’s not only the refineries that are affecting the price though. With the current oil surpluses, cutting back refining wouldn’t have an immediate effect on the pump price. There would be a time lag that we’re not seeing. So what do we conclude? Maybe Wall Street and the speculators are at it again, controlling the market to drive up the price and line their pockets at the expense of the American consumer? They wouldn’t do that would they?

And don’t forget about our “friends” in OPEC. They are doing their part by intentionally cutting production to try and drive the price up by affecting the current record crude oil stockpiles that have soared due to falling demand.

The station I usually fuel up at has raised the price from a recent low of $1.69 up to $2.09 last week. The fact is that the current price of crude is around $38 and if it stays below $40, we should not be paying over $2 per gallon at the pump. Supply is up and demand is down so the pump price should be stable or falling, NOT rising.

What can we do? Well, one thing we can do is keep demand low. Keep using less, keep conserving, limit your driving and do everything you can to use less gas. It’s the only weapon we have. If we do that and they keep raising the price and manipulating the market, it will become readily apparent to everyone.

Then we can watch and see what the economic “savior” and his administration will do about it…