T

he recent rise in gas prices (~ Feb-March 2000) is being used as a political football. Notice the symbiotic relationship between the press and the politicians (each stroking the other into a frenzied public mutual orgasm).

Just like the gun issue.

The pols want gun control so the press roots out every gun death ... the current favored death is the innocent child by accident variety ... and prominently display it on the nightly news along with the president's or someone else's heart-rending paean to the child-safety-lock.

In the gas issue, the press has decided that the "strategic oil reserve" should be opened up and will give air time to any pol willing to spout the new invective. (All in the interest ... once again ... of public mass orgasm.)

Notice also, that no mention is made ... from any quarter ... about the true and simple cause of the gas price problem. Which is this ...

Earth to USA ...

If you will recall, there was no winter of '98-'99. That is, none to speak of. Here in Texas, it was the first time in my life that I went through a winter without putting on a jacket.

Why? ... El Nino ... remember?

So people didn't need as much heating oil ... so there was too much oil laying around ... so the price dropped ... remember? 79.9 cents per gallon. ... And I said to myself then ... "Uh-oh we're gonna' get it up the poop chute if prices don't go back to normal real quick."

And now we're gettin' it ... ain't we?

Why is that?

Well ... (no pun here)
The Arabs produce a steady stream of oil to a steady market now. They learned their lesson way back in '72 that cartels don't make it in a free market. But ... there is a lag time form the time they pump to the time you pump. So the price dropped ... they responded to that drop (not to any hypothetical future El Nino generated drop but to the present actual drop). Then, following the glut ... we go back to normal and hit the shortage end of the stick. Now, they will increase production in response to the dearth of oil and prices will go down.

When?

For as long as they were low ... they will be high. Same, same ... all same (just in reverse).

What about the quantity of price rise? It seems more than the corresponding drop of last year.

It is more. Why?

Because business works on percentages ... not dollar increments.
Like this ...
The price dropped from $1.20 to $0.80 per gallon during the glut. That's down a third. Now, it will go up a third ... but another third distant from of $1.20 will bring the price to $1.80.

Get it? ... For a 40 cent drop we're gonna' get a 60 cent rise.