Look Ma, no hands! How gas prices DEFY the laws of PHYSICS
Ordinarily, what goes up must come down. But, not gas prices.
What? you say, gas prices follow the law of supply and demand, not gravity?
Okay, let's see.
Oil surged 3.4 percent [Monday] on speculation customers in Europe would switch to oil-based fuels. [because of the Russia-Ukraine stand off]But, their fears never materialized.
Russia and the Ukraine reached an agreement [Tuesday] on the issue of natural gas deliveries, banishing the specter of immediate and prolonged shortages because of Moscow's price dispute with Kiev.Great! False alarm. Prices can go back to normal now, right? Wrong.
Crude oil for February delivery fell 29 cents, or 0.5 percent, to $62.85 a barrel at 12:51 p.m. on the New York Mercantile Exchange. Futures touched $63.80 [Tuesday], the highest since Oct. 18.Hmmm, let's see:
Oil is 43 percent higher than a year ago.
Brent crude oil for February delivery fell 27 cents, or 0.4 percent, to $61.08 a barrel on the London-based ICE Futures exchange, formerly the International Petroleum Exchange.
- threat of supply disruption;
- prices surge 3.4%;
- coast is cleared; BUT,
- prices fall only .5 and .4%, respectively at the world's only two exchanges.
But, wait. There's more:
Fabulous! HEARTY supply, MILD demand, LOW prices, right? WRONG.
U.S. oil supplies in the week ended Dec. 23 were 12 percent above the five-year average for the date, the Energy Department said on Dec. 29. Inventories of heating oil were 1.7 percent above the five-year average during the same period.
Higher-than-normal temperatures will cover most of the U.S. from Jan. 9 through Jan. 17, according to the National Weather Service.
Heating oil for February delivery rose 0.06 cent to $1.797 a gallon in New York. Heating oil reached a record $2.21 on Sept. 1.Okay, what about gasoline?
Futures are 44 percent higher than a year ago.
Gasoline for February delivery fell 1.15 cent, or 0.7 percent, to $1.739 a gallon in New York. [don't get excited]So much for 2% inflation.
Prices are 48 percent higher than a year ago.
The regular gasoline price at the pump, averaged nationwide, rose 0.7 cent to $2.231 a gallon yesterday, the AAA said today on its Web site.
Pump prices are 26 percent higher than a year earlier.
So, what gives? Why aren't prices responding to supply and demand?
Answer: MONOPOLIES and SPECULATION (a sophisticated type of gambling -- no different from the business that creep Abramoff was neck deep in).
Like gamblers, speculators draw their riches from someone else's losses (sound familiar?).
But unlike gamblers, who exploit other gamblers also betting on the future, speculators exploit innocent bystanders merely trying to survive (i.e., us!).
Speculators jump at any excuse to bid up the price of FUTURES (e.g, Russia-Ukraine stand off, Katrina). They decide TODAY, based on their fears or whims, how high our energy prices will be TOMORROW.
So, what about SUPPLY and DEMAND? Out the window, friend.
Speculators control energy supplies through monopolies. For example:
The complex pricing plan Russia and Ukraine agreed to drew in a third company: a Russian-Swiss trading business, partly owned by a subsidiary of the Russian natural gas monopoly Gazprom, that will be the sole gas provider to Ukraine.And, because energy might as well be food (it's so essential in our lives) the DEMAND side of the equation has no effect whatsoever in pulling prices back down to earth once they're hiked.
[The agreement] puts the Russian-Ukrainian gas trade in the hands of a non-transparent company; RosUkrEnergo is owned by Gazprom's bank and a Swiss subsidiary of Austria's Raiffeisen Bank, [surprise, surprise] but the beneficiary owner of the latter share is unknown.
So basically, the price of FUTURES keep rising unabated by any market corrector, short of revolution.
So there you have it, folks. Next time you pick up the pump, know that it's NOT 'free market forces at play,' but some speculating son of bitch that's bleeding you dry.