We've done it again.
Today, a new national record high was reached for the average price of gasoline.
$3.22/gallon for regular.
Wall Street saw it coming. AAA saw it coming. Actually, everyone saw it coming.
The "experts" blame the new record high on the price of crude oil. True to test, the price of a barrel of crude oil flirted with $110 today.
The reason for the high price of oil? Well, we know it isn't increased demand. As a country, we have curbed our appetite, ever-so-slightly, for gasoline.
Is it because OPEC and other oil producers aren't pumping enough oil? Not really.
But, I encourage you to do a quick Google search on the stock prices for various oil companies. They're way WAY up over the last 10 years.
I'm smart enough to know that I'm not smart enough to know why the price of gas is so high. I just keep paying, trying to cut back where I can and hoping that the price will drive the need for a better alternative to fossil fuels.
Comments (1)
While lamenting the rising cost of gasoline on top of the rising food prices, no connection is usually drawn between the high cost of diesel and the higher costs of food.
Diesel (locally) rose to $3.70 immediately following Katrina and settled at about 3.35 for the 2 years that followed. Prior to Katrina it was about $2.75. Right now (03.26.08) diesel is running from $4.29 to $4.70 all over Chicagoland!
These are the fuel costs consumers have to pay for while being diverted to only look at the gas prices at the pump. Rising fuel prices with lower consumption appear to run counter to the laws of supply and demand. What gives?
Well, Saudi Arabia is readjusting crude prices upward to offset losses that would result from a devalued US dollar, while institutional investors move big money from weakened banking and financials into oil futures. Voila, supply and demand works again.
High demand for relatively fixed future oil supplies drive the future oil prices even higher-- record low consumption notwithstanding.
Gas car drivers don't just pay for gasoline-- everyone pays for diesel.
Posted by Kamau | March 26, 2008 10:49 PM
Posted on March 26, 2008 22:49