Monday, September 8, 2008

To good to last

Now it's been great lately. We've seen gas prices fall and we've even had hopes that it would last for a while (maybe a year or so). I mean we've all known it was inevitable that they would go back up. But here's the great news (read massive sarcasm here). OPEC is about to change all that. They have decided that it is unacceptable for the price per barrel of crude to go back to original levels.

When crude originally hit $100/barrel everyone was shocked. And it kept going up, all the way to over $145/barrel. Now it has come back down to near $100 an OPEC is unhappy. They are getting together to decide to shut down some of their production to inflate prices back toward $140. Originally the problems causing the massive inflation were two fold: 1) speculation by investors and others that the supply was running tight and that OPEC should increase production, 2)the power of the dollar was down. Well to fix the first problem OPEC spent time to convince these experts that they didn't need to increase production to help meet world need and that the supply was fine. And now the power of the dollar is rising.

So OPEC has decided that all that money that was originally flooding into their economies was great. And they can't fathom having that endless supply stop. Especially seeing that Americans are now demanding that their government enforce and create other forms of energy. So in order to combat the slight down turn in excessive profits they have started to knock around the idea of shutting down some production to falsely inflate crude prices. That's right folks OPEC nations will STOP producing as much crude in order to make the price per barrel return to those translating into $4/gal levels or higher who knows.

I have no idea what can be done if they do decide to stop production, I'm just mad about it. Any one have any suggestions?? How about our candidates? Do you think they know???


1 comment:

Jeni said...

Thoughtful post Jed. It runs deep doesn't it? I mean many European nations have been paying insane prices for gas for years, therefore, have invested more in alternative (public, mass) transportation. I couldn't really fathom why our government would continue to keep us dependent on something that is foreign...Until I realized that those politicians that are running that government, well a lot of em have a lot to gain from the sale of oil. Whether they are personally invested, or are funded by big oil companies.

Environment be damned....Come on let's drill up all of Alaska or do more off-shore drilling!!! That's got to be the answer.