High gas prices suck, and are still causing significant stress for Americans. This has led to a general gloominess of the overall situation, when the economy still is adding jobs and production, with nominal wages still rising. But I also think that the supply-and-demand situation in America doesn't match with those high prices, and if Americans do cut back on their driving, there's no reason for those prices not to go down. I think it's well past time for the Biden Administration and Dems in DC to hammer this and investigate anti-competitive practices. I also think that direct intervention may be in store, given that it is worldwide issues that are raising the worldwide prices, and do some "America First" actions of our own. This could include redirecting US oil exports back to America, use the Defense Production Act to speed distribution of oil and to increase refining capacity, and putting in a maximum pump price (say, at $4.25) while subsidizing gas stations to make up the difference. Given the supply-and-demand situation and the adjustments that will lower prices on their own in the coming months, short-term moves like this should be all that is needed.
People also need to understand that insofar as oil companies *could* drill more in the U.S., it's not because any govt agency is stopping them. They have thousands of permits they aren't using.— Matthew Chapman (@fawfulfan) June 13, 2022
It's because they expect demand to fall and they'd lose money on it.
Monday, June 13, 2022
Big Memorial Day weekend of travel has an effect, but lots of gasoline, oil still available
After a weekend of travel that included me choosing a $59 round-trip bus ride over driving to O'Hare and paying for parking and gasoline, I wanted to revisit some numbers on the availability of oil and gasoline in this country. With gas prices continuing to rise, I wanted to see if this caused any kind of decline in demand for the high-travel Memorial Day weekend. Now that the Energy Information Agency has gotten their figures out for that weekend, let's take a look and see what we have, and compare it to the more "regular" week before (through the Friday before Memorial Day weekend). this country is pumping out oil at 2019's levels, with more expected to come. And that, along with the dollar being at multi-year highs, is why US gas prices are generally lower than what Europe and Canada are dealing with today. And the choice not to pick up supply isn't anything related to DC mandates, but is more likely due to Capitalism 101 - maximize profits, not production.
Posted by Jake formerly of the LP at 7:55:00 PM