About twenty minutes ago, I heard ABC News on my car radio. The station carried a report about "soaring" gasoline prices. ABC reported that the current price for gasoline is a record for this time of year. Then, ABC went on to announce that the likely reason for the big price rise in gasoline is intervention by oil speculators in the market. That was full depth of the ABC coverage. Gas prices were up to record highs and it was because of those evil speculators in the oil markets.
The problem with the report, of course, is that it is completely false. Oh, not the fact that gas prices are sky high; that is true. What is false is that the cause of the high prices in gasoline is speculation in the oil markets. Gas prices have now risen for 32 days in a row. The price of oil, however, is almost exactly the same as it was 32 days ago. Further, gas prices have hit a record high for this time of year. One year ago, however, oil prices were over 15% higher than they are now. Clearly, the high gas prices are not due to any jump in oil prices, and speculation in oil markets could not be the cause of the high gas prices.
ABC uses the speculator story because it allows them to blame the imaginary evil rich folks who manipulate the oil prices for high gasoline costs. It fits right into the usual leftist class conflict paradigm. The sad thing, however, is that most folks who hear the "news" from ABC have no way of knowing that they are just making this stuff up.
The problem with the report, of course, is that it is completely false. Oh, not the fact that gas prices are sky high; that is true. What is false is that the cause of the high prices in gasoline is speculation in the oil markets. Gas prices have now risen for 32 days in a row. The price of oil, however, is almost exactly the same as it was 32 days ago. Further, gas prices have hit a record high for this time of year. One year ago, however, oil prices were over 15% higher than they are now. Clearly, the high gas prices are not due to any jump in oil prices, and speculation in oil markets could not be the cause of the high gas prices.
ABC uses the speculator story because it allows them to blame the imaginary evil rich folks who manipulate the oil prices for high gasoline costs. It fits right into the usual leftist class conflict paradigm. The sad thing, however, is that most folks who hear the "news" from ABC have no way of knowing that they are just making this stuff up.
3 comments:
The actual reason is many Refineries are shut down retooling/preparing for the summer blends of fuel which are a different type.
Therfore supplies are lower=Price higher!
http://www.nacsonline.com/NACS/Resources/campaigns/GasPrices_2012/Documents/NACS%20Fuels%20Report%202012_WhyPricesHistoricallyGoUpinSpring_darkred.pdf
Crude oil prices are the biggest factor driving gas prices, but how the crude oil is processed can also play a significant role in price increases. The petroleum industry’s switchover to summer-blend fuels, a process that begins each February and ends June 1, creates challenges that also affect retail fuels prices. Since final implementation of the Clean Air Act Amendments in 2000, the seasonal transition to summer-blend fuel has helped gasoline prices climb significantly before they reached their peak. Comparing prices the first week in February to their seasonal peak, increases have ranged from a low of 20 cents in 2003 to a high of $1.13 in 2008; on average, the average annual increase is 54 cents per gallon.
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