For the past year the American people have reduced their use of gasoline in a number of ways in answering the cost increase of gasoline that hit $4.00 gallon. There is a surplus amount of gasoline on the market and the combination of both have brought the price of a barrel of oil and a gallon of gasoline down to its present level.
The national rig count of rigs working in the U.S. has dropped and so has the Louisiana rig count in response to the reduction in use of those fuels, plus the fact that inventories are outpacing demand. So why is the price of oil still in the $50/barrel range and gasoline still in the $1.90/gallon range? The answer is manipulation by the oil industry. That same manipulation occurred to create $147/barrel oil and $4.00/gallon gasoline. There was not any shortage of oil or gasoline at any time during the run up to record price levels. The industry created a smoke screen using the Iraq war and talk of inventory shortages to manipulate the prices.
The oil and gas industry is now saying they can not make money at the present level of oil prices. They say they borrowed money to do more drilling and expansion when prices were in the stratosphere and now can't afford to carry on with those plans at current prices. It is just another smoke screen excuse to keep prices high while demand is falling. They are betting the economy will improve and the people will go back to their old driving habits that will give the oil companies a higher base to start increasing their prices again.
The other factor is the Bush's administration meeting with the energy industry representatives chaired by V.P. Chaney. Those meetings were held in secret and the decisions that were made at the meetings are still secret and with held from the public. There has been no disruption in the availability of oil or gasoline in the past 8 years that compares to the disruption caused by the Arab oil embargo of the 70's, yet the manipulation of prices during the past 8 years have been more severe and longer lasting on the American people. Hopefully, the people will continue to use less and less oil and gasoline in favor of other alternatives.
2 comments :
Hope the people continue to buy hybrid auto's and the new electric when ever they come out. Lets go green and let the oil companies grow green with envy.
The current price of gasoline shows how the oil companies operate. Supply and demand is supposed to control the price and with demand down the current price of gasoline should be less than it is. It is the old shell game, and the oil and gas industry are masters at playing it. I too think the Chaney thing is to blame.
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