RSS 2.0 FeedGet Ready For The Demagogues
by Doug MataconisIn case you haven’t noticed, gasoline prices are headed up again:
Gasoline prices have jumped 33 cents a gallon across the United States over the past month — the result of higher crude oil prices, greater demand and fears of shortages.
The average price of a gallon of regular gasoline rose 13 percent, from $2.21 to $2.54, according to a survey by the AAA automobile club.
“And prices are headed higher,” said John B. Townsend II, a spokesman for AAA Mid-Atlantic. “We’re talking 15 cents to 20 cents higher by the end of the month.”
We all know what will follow shortly thereafter. There will be denunciations of the “evil” oil companies and whispered talk about conspiracy and collusion. When ExxonMobil releases yet another record profit statement, Democrats on Capitol Hill will undoubtably call for hearings. And, since there’s a Presidential race going on, you can bet that Hillary, Obama, and the rest will have something to say about all of this.
But why is this price spike really happening ?
The higher prices are driven, in part, by higher crude oil prices, which have hovered around $60 a barrel late this winter, although oil futures dropped below $59 today.
But there’s a supply-and-demand issue at work, too, as oil refineries close for maintenance while they switch over from making winter fuels to producing summer fuels, and as motorists hit the highways during stretches when the weather was warmer than usual this winter, according to Townsend.
Add into that fact that the most of the world’s supply of oil comes from the most politically unstable part of the world. One confrontation between the United States and Iran, or even a few terrorist attacks at key oil depots, and supply could be severely constrained. That’s one of the reasons that the price of oil has been so consistently high — the market believes, quite reasonably, that there is a risk to the oil supply from Middle East tension. As long as that’s the case, we’re going to see price fluctuations like this.
[...] Original post by Doug Mataconis [...]
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