Low Gas Prices? Don’t Get Used To It.

23 Oct

Gas prices have dropped from a national average of $4.10 on July 16th to $2.78 today.   Joe Six-Pack (or the Plumber) is probably pretty happy about that.  $2.78 is also just about what a gallon cost last year at this time.  What happened in the interim to drive prices up over that four dollar mark?  Were the world’s oil reserves running dry without OPEC realizing it?  Did everyone in America buy a Hummer and go joyriding?  Don’t think so.  And what drove the prices back down?   Were previously untapped reserves discovered under Jed Camplett’s Bevery Hills Mansion?  Was a well drilled under every moose track in Sarah Palin’s Alaskan wilderness?  Did John McCain drill offshore wells faster than Wilt Chamberlain tapped stewardesses?  Not likely.   

However, there are several factors that can explain the astronomically rising prices:

During the Oil and OPEC friendly Bush administration, Oil Companies enjoyed record profits.  It’s a wonderful example of cronyism establishing a friendly business environment.   As Antonia Juhasz of the Asia Times notes:

What does $133 billion in profits buy an industry? It bought the oil industry at least eight years of a US “oiligarchy”: a government ruled by a small number of oil interests. The oil industry spent more money to get the George W Bush administration into office in 2000 than it has spent on any election before or since. In return it received, for the first time in American history, a president, vice president, and secretary of state who are all former oil company officials.

What this means is that you and I and everyone else in the United States has been–and will continue to be–manipulated.  A survey of the past six years finds that in the election years of 2002, 2004, 2006, and now 2008, gas prices have taken a significant dip in the months of October and November.  

It’s unlikely that this is coincidence or a result of Americans driving less because they enjoy walking in the crisp fall air.  It’s simply government-aided capitalism (Does that sound familiar?) at its finest.

Gas prices rose unitl the citizenry became aggravated to the point (apparently just short of $5 a gallon) where our legislators were forced to actually do their jobs.   Bills like the PUMP Act and the Close the Enron Loophole Act were introduced.   Gas prices started their slide.  Now the American public is quick to forget they were shelling out $4 a gallon this summer and are happy to fork over $2.78 (only 30% more than two years ago!).   Let’s hope that the legislation doesn’t disappear along with the peoples’ agitation. 

Of course, to maintain the status quo, President W Bush and his oil sidekicks know that it’s best to keep the masses pacified, especially in an election year.  The Republicans can’t have Obama ranting and raving about gas prices can they?  People might actually be reminded to listen when they go to fill up at the local Quickie Mart. 

So, not so mysteriously, gas prices have receded.  In the words of Sex Pistol Johnny Rotten:  “Ever get the feeling you’ve been cheated?”

Have no fear, by New Years 2009 the price of a gallon of gas will be closer to $4.00 than our peaceful $2.78.     It is supply and demand.  The American people have a great supply of money and the oil companies will once again demand it.  Common sense tells us that the final month of 2008 may be Big Oil’s last chance before they ride off into the sunset with the Bush gang.  Then again, they give money to Senators and Representatives and the Democratic candidate, too.

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3 Responses to “Low Gas Prices? Don’t Get Used To It.”

  1. Daniel October 24, 2008 at 9:43 am #

    http://biz.yahoo.com/cnnm/081024/102408_oil.html?.v=2

    1.5 mil barrel cut didn’t even impress the market.
    If oil sinks below $50, [Robert Laughlin, senior broker at MF Global] said OPEC will be forced to act and cut production again.

    Doesn’t seem to tie in with your story.
    Your opinion please.

    Daniel

  2. alguschip October 24, 2008 at 10:06 am #

    It’s comon sense that OPEC would cut production to maintain a desired price. And recent history has born out that higher prices equal higher profits the US oil companies. It’s a global industry, also effected by the financial markets–at some point there has to be funds available to pay. I find it strange that OPEC has waited even this long to discuss a cut in production. After the US elections, oil prices will start creeping back up. Although there is only circumstantail evidence, it appears that the oil forces are working in concert.

  3. george in the sticks October 28, 2008 at 11:31 pm #

    Not to quibble too much, but a close reading of the chart suggests similar drops in 2005 to 2006 and 2003 to 2004. One of a less suspicious mind would also like to see a longer run than such a short series to suggest such a large conspiracy. That said there’s no challenge here that oil companies are adept at fattening their bottom line by any means necessary. Who knew they were Malcom X disciples.

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