L.A. on brink of $4-a-gallon gasoline ahead of holiday weekend - latimes.comAnother factor driving gasoline prices higher: U.S. refineries continue to set new records for exports of refined fuels because they can make more money selling products like diesel overseas.
During the week of Feb. 10, refineries exported a record average of 3.1 million barrels of refined fuels a day. That's up 42.6% compared with the same week in 2011 and up 80.6% since 2010.
When 64% of oil sold in a month went to speculators then you know that the system is broken. When oil went up during the first and second oil crisis, speculators accounted for a minor part of the trade.. that was fear.. that was based on facts.. Today speculators control the prices of oil (and other commodities and bond yields) as they see fit.
Tell me why oil is now HIGHER than it was when Iran threatened to close the Straits of Hormuz a few weeks ago? Why has oil been around 100 dollars for a long time, despite Libya being peaceful again?
Oil is finite. Our demand for it is not. The entire fabric of human civilization is now entirely dependent upon oil, and in the grand scheme of things we're burning through it about as fast as we can, and emerging economies are catching on to the hype too.
There may be little ups and downs, but these short term fluctuations are ultimately irrelevant, as the trend is undeniable and inevitable: petroleum will always be more expensive than it was before.
Last edited by Neomalthusian; 02-23-12 at 05:18 PM.
"The knowledge and prudence of the poor themselves, are absolutely the only means by which any general and permanent improvement in their condition can be effected." - Thomas Malthus
Lastly, if Speculators are buying 60% of the oil, where are they buy it from, and what happens with the other 40%? Is the remaining 40% affected by prices set by speculators?
Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.
Alexis de Tocqueville