I truly understand the principles of supply and demand. We have system set up wherein we, the American people, are held hostage by the oil industry. There is no real shortage of oil. None. Yes, there is increased demand by China and other emerging nations, but for the most part there is no shortage… yet prices went up? Why? The explanation that we’ve been given is ‘CUZ. That’s the official explanation. Oil speculators think that there may be an oil shortage in the future. So, they are bidding up the price of oil and we have to pay more. When we get angry and stop driving, this increases the supply and oil prices magically come down. There has to be a better way to run an industry where we, the American people, aren’t getting shafted by speculators.
America is suffering from another oil price shock less than three years after prices hit a record of $147 per barrel in July 2008. Over the past month oil prices rose by over $20 per barrel, or more than 25 percent. This price hike reflects political instability in many oil-producing Persian Gulf nations. And Wall Street speculators have preyed upon oil users’ fears about supply interruptions to bid up the price to over $100 per barrel.
As the price of oil climbs, so too does the price for gasoline. Every $10-per-barrel increase in oil prices boosts gasoline prices by 25 cents per gallon. Many Americans do not have the option to significantly reduce their driving or easily buy more fuel-efficient new cars, so they spend more on gasoline and less on other goods and services. This slows our nation’s still shaky economic recovery and disrupts job growth. Meanwhile, our economy ships off nearly a $1 billion per day to other nations to purchase foreign oil. And higher prices due to instability and speculation inflate the profits of big oil companies while Americans’ wages remain stagnant.
It’s time to get control of volatile oil prices that are hurting our economy, our security, and the everyday budgets of American families. These measures are crucial for longterm economic growth, more jobs, and less dependence on foreign oil. They work together to reduce imports and save money. (more…)