Is it possible that the speculators who are inflating the price on the world commodity market do not really care about an economic recovery in our country ??
Gas company guy stated that he could see no supply shortage and demand is pretty low right now. In other words, he could see no logical reasons for sky high prices.
There's no logical supply and demand reason in the short term, and of course those who determine the prices don't care about the US economy. But if you take a somewhat longer-range view, it IS all about supply and demand. World demand is increasing rapidly. We've already run out of most of the cheap easy oil. World production is peaking right now, we may well have already passes the "Peak Oil" point. The short-term spikes in prices are due to speculation, but that speculation is based on world-wide supply and demand.
The folks who control the oil (and the ones who buy and sell it) are not fools. They can see what many of us refuse to see, that oil is going to get more precious and expensive, and it may happen quite quickly. Why would they want to sell it cheap today when it's going to be worth much more tomorrow? The price volatility is one indicator that we are running "close to the edge" in terms of supply. That's why even minor events in oil-producing countries affect the price so much immediately.
It's going to get worse before it gets better. We can't do much about it except to use it more efficiently and start to move toward other energy sources. The oil is running out. We can continue to subsidize it (with our tax dollars) through big tax incentives for very profitable multi-national corporations, and by our military activities in the mideast, and by fiddling around with our strategic reserves, but that only shifts the cost from the individual user to the middle class (since they are the ones who pay most of the taxes these days). These strategies only postpone the inevitable and make the crash happen a little later and harder.
We can't drill our way out. We use one-quarter of the world's petroleum. We have about 3 percent of the world's oil reserves. If we fully implemented the "drill, baby, drill" strategy tomorrow, it would only make a small difference. Most experts think it would only amount to a few months of our consumption. And there's a very good argument to be made that we would be better off leaving it in the ground for now, since it's going to be much more valuable later. Not only that, but there may come a time when we can't buy the oil we want at ANY price, and those reserves would be very handy then.
Bottom line, oil prices are determined by world supply and demand in the long run. They will go up. We can't do much about it. This will be a trend, but we will probably reach a point where the supply is short enough that the bidding war will start, and then the price increases will be very substantial. In the short term, we can expect volatility in the pricing to continue (and to get worse) because of short-term speculation by individuals who can see the writing on the wall. These folks (mostly) don't like us. They're going to make lots of money.
The sooner we wake up and acknowledge that oil is a finite resource, the better. We will have to switch to something else. We can either start doing that now or wait until we have to. Efforts to keep the price artificially low will just make things worse later. And yes, the price IS artificially low. Anybody think oil would cost the same if we didn't provide those tax incentives to the most profitable corporations in the world? Anybody think oil would cost the same if we didn't spend massive amounts of money using our military to keep the flow going? Our politicians are convinced that we have to do these things to "prop down" the cost, or our economy would suffer, but how long can we keep doing this, and at what cost?
The choice is whether we start an orderly transition to other fuel sources, thereby minimizing the pain and spreading it out over time, or whether we ignore the obvious, continue as we have been going, and wait until the excrement hits the fan and deal with that catastrophe when it hits us hard.
