The second greatest jump in regular gasoline at the pump has occurred the last two weeks. The jump has been 33 cents a gallon.
“The oil companies are not the culprit, they are the beneficiary,” said Don Good of the Good Oil company in Winamac. “They benefit from all this and I don’t think that you’ll find the oil executives sitting around the table crying over $100, $130 crude because they will just make a lot of money off of it. They aren’t the ones driving that market, but they’re more than happy to ride along.”
As he has in the past, Good reminds us that the Wall Street speculators and hedge fund managers have a lot to do with oil prices.
“People need to remember that the top 15 hedge fund operators made over a billion dollars a piece last year and that was their personal income. One of the biggest things that they traded in that hedge fund was oil. That kind of tells us who’s pulling the strings on this. It’s kind of scary that those few people can control that much power.”
Good says the jump is not because of supplies, or high demand.
“January was particularly soft across the country, even compared to January of last year which was down the previous year. The conventional wisdom as the industry that we peak in oil consumption in this country about two-and-a-half years. We’ll never hit that level again.”
When you’re looking for reasons oil prices are going up now and in the future look to the far-east. China is a real competitor.
“China has about 25 million cars right now. Within 15 years, they expect to have 500 million so that’s a huge increase China. If that holds true, regardless of what we do in this country, oil prices will continue to do with the Chinese market.”
Here’s a gas tip: The best speed in a normal car is 55 miles per hour. After that speed, the engine yields negative marginal return on fuel efficiency. As the engine struggles to turn the wheels faster and fight wind speed, you lose miles per gallon. Slow down and save.