U.S. Energy Secretary Steven Chu said on Wednesday he will speak to OPEC ministers before their meeting this weekend and warn them as they consider another oil production cut that high crude oil prices will harm the fragile world economy. That is the same “pity line” used on OPEC by the Bush administration last year when crude oil prices spiked up to $147 a barrel in order to get them to increase oil production thereby lowering oil prices.
Instead the US should be looking towards Canada to keep crude oil prices stable. We currently import 80 per cent of our crude oil from our northern neighbors. Whatever happened to increasing domestic oil production as part of the US plan to becoming energy independent? Does anyone in President Obama’s administration even know the location of the Bakken oil fields in North Dakota? Or are they holding it against them that they were a red state and haven’t voted for a Democratic President in forty years? The Arctic National Wildlife Refuge in Alaska is thawing out awaiting the word on its fate as well. But why would the current administration want to give Governor Sarah Palin a good reason to make a run in the next Presidential election? Oil is politics, and politics is oil!
For more current news, finished petroleum prices are higher in the U.S. following two days of losses totaling more than 8 cents per gallon for diesel and gasoline with crude oil down $5 to under $43 a barrel. But hope springs eternal that both of them will recoup their losses today as the market has now absorbed the effects of the Energy Information Agency weekly Department of Energy inventory report.
April WTI topped the $47 a barrel level late in the session, hitting $47.22 a barrel and settling just below that level at $47.03 a barrel, a gain of $4.70. Gasoline and diesel prices followed suit up about 6 cents per gallon today. The main drag in the DOE’s weekly report was jet fuel demand for the last four-weeks is 12 percent behind a year ago and diesel demand off by 6 percent of the last four weeks. This is a foreboding to oil refiners that their most profitable products last year will not be in great demand in the next few months.
That will only change when commerce in the US gets back to normal and people start traveling again by planes. That is good news for gasoline prices as they should remain relatively stable and will not be spiking back up to the levels endured by US motorist last year. Unleaded regular gasoline price rose 2 cents last week to $1.9625 per gallon according to the Lundberg Survey published last Sunday.
The West Coast gasoline prices are about 20 cents per gallon higher than the rest of the US due to the early mandated switchover from winter to summer gasoline. The remainder of the country will now be enduring the same with a resulting increase in the price of gasoline. This is due to the oil refiners processing summer gasoline with a low Reid Vapor Pressure, which prevents knocking in engines during the hot summer months, resulting in an overall ten per cent reduction in supply.
You could be humming that old show tune alleged to in the title of this article about right now. But you may have to wait until the fat lady sings to find out what happens next in this “to be continued” saga.