Last July-August (2008), the gas prices in the U.S. reached its zenith. The average gas price of $4.12/gallon ($4.65 in SF Bay Area) just exacerbated and highlighted the world’s economical meltdown. Back then the crude oil prices hovered way past $100 per barrel. Then, between October and December of 2008, the gas prices plummeted… all the way down to less than $2/gallon, in some cases.
Today’s value of crude oil is about half of what it was, and hasn’t gone up more than $17/barrel since the ‘gas price crash’. Yet, those plastic number slots at the local gas station are getting busier than a bunch of first graders on a field trip to the Jelly Belly factory. Just in the last 3 weeks we have observed a price increase of about $0.50/gallon. So what gives?
The demand of oil hasn’t increased dramatically in the last few months. There is a natural increase in oil demand during the summer months, but that usually translates into about a 15-25% rise in gas prices and during the summer months (read: June-August). A quick research suggest that OPEC (union of oil producing countries) is artificially decreasing oil production to inflate the supply-demand ratio, thus spiking up the recent gas prices.
It wasn’t bad enough that the guilded Ferraris, the desert indoor ski resort, and the entire City of Dubai was paid for by the gas consumers. Once the greedy heads of the OPEC countries had a sharp decrease in profits, they have realized that they cannot afford the excess and superabundance anymore. Which means one thing… we have to pay more at the gas pumps, again.
-KF
