>Why Are Gas Prices Dropping?

>Yet more evidence that Newt Gingrich’s “Drill Here, Drill Now, Pay Less” campaign is bullshit: we’re two months into a six-month ban on deepwater oil drilling and gas prices are tumbling:

CAMARILLO, Calif. — The average price of regular gasoline in the United States has dropped more than 11 cents over a three-week period to $2.72.

Not possible! We were told that unless we drill for oil offshore, we’d be paying $4 and $5 a gallon! Instead, gas prices have been dropping since the oil spill started:

WASHINGTON (MarketWatch) — U.S. consumer prices decreased in May for the second straight month as gasoline prices fell, the Labor Department reported Thursday.

And no, I’m not suggesting that the oil spill is responsible for lower gas prices. That’s just stupid.

So why are gas prices dropping like a rock, despite a ban on offshore deep water drilling? Here’s an idea:

Analysts say a sluggish start to the summer vacation season has increased gas inventories, and serious economic problems in Spain, Portugal and Greece have helped lower prices as the dollar rose in value against other currencies.

The price drops, which began May 7 when the financial crisis in Europe worsened, have reversed a trend in early 2010 that had seen gasoline prices rising considerably higher than the previous year.

Hmm. So apparently the price of gasoline is more affected by world events and the global financial market than how many rigs are drilling off the coast of Mississippi.

Interestingly, the story goes on to say that hurricanes in the Gulf of Mexico could disrupt drilling operations and cause prices to go back up. That is an excellent reminder to us all that there is, in fact, offshore oil drilling going on in the Gulf of Mexico right now, as I type this. Republicans and even a few Democrats keep telling us that unless the deepwater moratorium is lifted, it will be an economic disaster for states already crippled by the oil spill, like Louisiana. Which ignores the fact that the oil industry is still chugging along down there.

So talk about platforms, specialized equipment and even the workforce leaving the Gulf of Mexico strikes me as unnecessary fearmongering. There’s still drilling going on, just not in water deeper than 500 feet. In fact, only 33 deep water rigs have stopped operations: so little that we haven’t even felt it at the pump. Gas prices are actually going down.

So quit yer whining. If there’s some deep-well engineering firm that’s going to have to leave the Gulf of Mexico because they are out of work for six months, see ya. Go pollute the waters off of Norway or Brazil (if you can). Take your trashy, polluting, risky, unsafe industry somewhere else. I’m not going to have a sad. I’d rather have some shrimp to throw on the barbecue and you guys screwed that up for us for good.


Filed under gas prices, Gulf oil spill, oil industry

3 responses to “>Why Are Gas Prices Dropping?

  1. >The crude oil being pumped out now won't reach market as gasoline for many months. First it has to shipped to a refinery and then refined and shipped to location of sale. It is much more likely that lower prices now are due to changes in consumption at the pump as people have less money to spend on things like auto travel. Grrrr.

  2. >Sure, gasoline prices *seem* to be dropping now but all its gonna take is a refinery worker stubbing his toe and bingbangboom! there it goes up again.The 'standard' excuse every year… 'refinery down for unscheduled repair'… somewhere in the universe. Expect it to rise for the 4th of July holiday.

  3. >It has got to rise. Somewhere in the world a country is hurting so, "let's ask America for help." They'll do it, they help foreigners before themselves…..