Bush Speaks, Marketplace Corrects

NPR Marketplace does actual journalism. Today Bush spoke, in part about high gas prices and Marketplace read between the lines. Well actually I think they read all the lines and pointed out the lies. There's plenty of supply, demand in the US is actually down (first time in 17 years, probably because of high prices and this is what we want). Opening ANWR wouldn't accomplish anything for many years.

Also, refining capacity is up. "We have probably more than half a million barrels of new refining capacity per day under construction right now and I wouldn't be surprised to see another 100,000 barrels per day of new capacity announced in the next six months to a year." Republicans always talk about "building new refineries" and that's a misdirection. Yes there are fewer refineries because small ones have been bought by big ones but the big ones keep getting bigger.

So what is the cause? "Well, most analysts say it's a combination of a couple of things. They say as long as the value of the dollar keeps sinking -- and oil does get priced in dollars you know -- the price of oil has to go up then, so that the sellers can make up the difference in their purchasing power. That doesn't entirely explain this, though. Last year, for example, the dollar dropped a little over 10 percent, but at the same time, oil prices were up around 50 percent, so the major factor here seems to be the wave of investment dollars that are flowing into the oil market, the speculators driving prices higher. Here's a number for you: about $9 billion was invested in oil futures back in 2000. Well, that's now up to $250 billion and even the head of Exxon Mobil blames wild speculation for all this."