Why the hell are gas prices going down?

Now the terror alert means higher oil prices, which oddly enough means higher profits for oil companies giving them more money to give to politicians whose policies may favor the oil companies such as raising the terror alert level. As Simba once told us: “It’s the circle of life.”
~Jon Stewart

Something Dargon asked me not too long ago. Why are gas prices going down? I gave some ridiculous answer…something to do with OPEC possibly driving down the price to keep Americans driving. A stupid answer, as I later realized.

During the latest surge in gas prices, it took very little to drive them higher and higher. A hurricane in the Gulf that threatened offshore drilling or onshore refineries would make the prices jump.

And yet we currently have a fucking moratorium on offshore drilling and the prices keep dropping. By all accounts, gas prices right now should be insane.

And no, gas prices are not low to keep Americans driving. Most Americans will continue to drive with very little change in their habits regardless of the prices. There’s been a slight drop in miles driven, but nothing massive. But that was in response to ridiculously high gas prices over the period of several years and a failing economy. OPEC’s in no danger from Americans suddenly biking to work. No one’s going to park their cars in any number if gas creeps back up to three dollars a gallon or so. Four and five dollars maybe. Three, no. More on that subject later.

But the gas prices aren’t rising, they aren’t even staying the same…they’re dropping. Something’s up, and I don’t know what it is.

It’s not BP and other oil companies’ public image, that’s for sure. They have us by the damn balls…they don’t care what we think of them. BP will probably go down because of this, yes, but ExxonMobil, Shell, and all the others will march on.

The AP seems to think it’s the crazy economic shit in Europe and the strong dollar that’s doing it. “The massive oil spill in the Gulf of Mexico has had no impact on fuel prices because it’s had only minimal impact on petroleum production, analysts say.” The same could have been said about the refineries threatened by Hurricane Ike. And I’d say a moratorium on offshore drilling in the Gulf will have more than a “minimal impact” on gas prices in the future. So unless this is just a case of Economics-Is-All-Crazy-Bullshit-Head-Games I have no clue.

I don’t like it…I don’t like it at all.


2 Responses to “Why the hell are gas prices going down?”

  1. Dargon Says:

    I have two hypotheses right now. The first is simply in this recession, they have dropped the prices in order to continue to turn a profit. Runs counter to the idea that people will continue to drive regardless of price, but with the U6 rate what it is, it seems more plausible now than it did when gas was $4 a gallon.

    The second is that, for whatever reason, the full-up ships that had been anchored offshore to create the artificial shortage have, for whatever reason, had to dock and offload. Heck, it is even possible that the oil on the gulf forced those hanging offshore in the gulf to dock.

  2. I’ve got a feeling it’s more political than anything. Keep people happy wit low gas prices over the summer, then they won’t be in a foul mood when you slip something like the Card Check bill under everyone’s noses. Obama, by the way, is a big supporter there. One of the first REALLY BIG issues I’ve seriously disagreed with him on. That’s for another time, though.

    If you want to see some scary economic shit, google “JPMorgan Chase Andrew Maguire”

    Apparently for the last year and a half, JPMorgan Chase has been manipulating the precious metals market, and people with power and authority to do something about it are sitting around twiddling their thumbs even though there is a PREPONDERANCE of evidence. This may not sound like a big deal, until you realize that ALL national currencies in the free world are tied in very closely to the precious metals, esp gold.

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