Mercury Rising 鳯女

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Archive for May 14th, 2012

Getting gaslighted on gas

Posted by Charles II on May 14, 2012

The American people are being propagandized that high gas prices are due to Obama Administration drilling policies. If we had a functioning press, people would know that the price of gasoline is determined by (a) the current cost of oil production, (b) the cost of refining, (c) expectations about future supply, and (d) miscellaneous factors such as distribution costs and taxes (regulations can be thought of as a cost of production, refining, or distribution).

So now Javier Bias of Financial Times reports that in January, refineries were shut down to remove 1.6 million barrels per day of gasoline from production. Not so coincidentally, RBOB gasoline futures leapt from $2.70 to $3.40. Now refineries are being put back on line to add 1.3 million barrels per day. Industry analysts say that over the longer term refineries will be closed to “rebalance supply and demand.”

In other words, to gouge consumers.

If people don’t want to vote for Obama, that’s their business. But they shouldn’t do so because of a lie. Neither the Keystone pipeline nor regulations nor taxes are driving gas prices. What’s driving them is speculation, market manipulation, and the rising cost of recovering oil from deep wells and unconventional sources.

Posted in Oil, The Plunderbund | 6 Comments »

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