Here & There Column 6-9-09

Our Klatsch Discusses Rising Gas Prices

Our local Sullivan County coffee klatsch sort of went on the warpath at our recent coffee and donuts get together when one of our seven regulars stated that gasoline consumers are being ignored during this economy crunch as oil is plentiful and the demand is weak but gas prices are rapidly going up.
So what's up with this we asked.
One of our klatsch members who studies these type of issues pointed out the traditional laws of supply and demand don't always apply to oil prices.
In talking to a local heating oil dealer and when asked about the rising gasoline prices their remark was "they are sticking it to us again."
All of us have read and heard television news reports that all storage tanks everywhere are brimming with oil and not many are buying because of the great downturn in the economy.
Several of our klatsch members noted they had read that the OPEC cartel in the past two weeks voted to maintain output at current levels.
Somewhere between our second cup of java and those delicious home baked donuts we all agreed that OPEC really doesn't give a hoot about us Americans and we should never expect an increase in oil output because they just don't care about bringing some relief to gasoline consumers.
We questioned then why has oil gone up $10 per barrel in the last month when there is no substantial change in demand and little or no change in inventories.
Our entire klatsch was very negative with the oil industry saying the price increases seemed to be as a reaction to a weak dollar and speculation and that these gas pump increases could not be explained by any changes in supply and demand.
The klatsch readily agreed that oil companies and distributors see the writing on the wall as automobile manufacturers prepare to build more gasoline efficient vehicles and more of us buy hybrids.......so to combat this slow but steady decline in gasoline sales that very well could be the reason we are seeing the increase in gasoline prices.