I have a few thoughts on the topic of oil and gasoline prices, I am not sure if any of them are solidly based in truth but I will share them anyway.
1) Oil is priced in dollars. The value of the dollar is dropping like a rock, thus the cost to buy a barrel of oil has increased.
2)But since the value of many competing curriencies has been on the rise independently of the dollars fall, it is becoming easier for some other nations to purchase oil despite its high price in dollars.
3)There is more demand than ever for oil, and alternatives are dreadfully under developed. More people ,more houses, more buisnesses, and more cars and comercial vehicles(and thats just in the USA). Add to that the emerging middle class in asia and the demand is genuinely at record levels.
4)Due to the colapse of the US realestate market investors (mostly speculators) are now investing in the next sure thing... oil and other energy comodities. Realestate bubble down/Oil bubble up.
5)I belive that there is an oil market bubble right now, but it is still in its early stages, as the realeste market continues to contract further and its effects ripple across the world economy, more speculating investors will push up the oil prices even if demand levels off (it will never decrease until supplies are truely drying up).
6)The oil companies profit from high prices at the pump no matter what the cause. A little over a year ago I said that now that they figgured out that americans will pay three dollars a gallon they will do everthing in thier power to keep it there. Consumption has not gone down signifigantly, it at all, since gas was about a dollar a gallon in the late ninties; this fact has not escaped the notice of the oil companies. Also since the ninties the oil companies have been merginging and consolidating, as well as shutting down refineries(wether or not they are out of compliance). I have also noticed that there are far fewer gas stations on the streets, and indie gas stations are almost extinct. All of this leads to tighter control of the fuel supply and market by fewer companies. Not a monopoly, but possibly collusion. The anti-trust regulators have been silent on this as far as I can recall. They have been bothering microsoft instead.
I imagine the oil companies have buildings full of lawyers coluding on just how to manipulate the market to the fullest extent possible with out running afowl of the law. And they can buy new laws when it is nessary.
7) In conclusion, I expect that the price of crude and gas at the pump will continue to climb for a while longer, five dollars a gallon is definitly possible this year, where ever it peaks it will then fall back a bit. The cycle could repeat again after that.
And hopefully consumers will then stop waiting for the government to fix the problem and start taking consevation measures in thier own hands. Demand better fuel effiency in all new products and take your own role in consevation to heart.
My family can't afford a super fuel efficient new car right now, but the one we have is a 4cyl sedan, not an SUV, and I keep it in top possible tune, and we are working hard to combine as many trips as possible to reduce overall miles driven.
I honestly do regret that there will be fewer road trips for us this year, that is probably the best part of car culture.
Just my $.02 (and decreased to $.01679 due to the falling dollar durring the time it took me to write this rant)
