Here in the United States gas prices have been steadily climbing the last few months, but in the last few weeks, they have been skyrocketing. Today, where I live, in Northeastern Ohio , prices ranged from $2.45 to $2.75 a gallon. In some areas, mainly California, prices are hovering near $3.00.
Less than a month ago, they were below $2.00 and going back a few more months, they hovered around $1.75. What has happened? Did the world start to run out of gas this month? No, there is still plenty of the smelly stuff around. Did the price of crude oil, the product used to make our gas, skyrocket? No that price is still relatively low. So what's up with the price of gas?
Let us see what the experts tell us. Some say that there is a slight drop in OPEC (Organization of the Petroleum Exporting Countries) exports of Crude as the cartel tries to match a slump in global demand. Some experts also say that Crude now fetches nearly twice its February 2009 price, mostly on the expectation that the dismal U.S. economy could be stabilizing. Oh, that's nice. Prices are going up because it looks like our economy is getting better!
Goldman Sachs boosted its forecast for Crude prices based on expectations that the economy will stabilize and OPEC production cuts will shrink global supplies. It now expects oil to cost $85 a barrel by the end of the year, up from its previous estimate of $65 a barrel. Why would OPEC cut production if the US and world economy is getting better? Could it be for profit? Speaking of profit, did you know the most profitable company in the US is Exxon Mobil? And yes, in case you do not know, they sell gas.
When gas prices substantially go up it costs more for people to drive to work, come to your home to repair your washer or dryer, or to truck our food to grocery stores. When gas goes up, people unquestionably spend less on other things such as food, restaurant dining, and products in general. Now, couple this with Chrysler slashing employment by thousands, GM doing the same, and companies in every corner of our country struggling more than at any time in recent memory and what do we have? Seriously tough times, is what we have!
Does Exxon Mobil care? Does OPEC care? Do our politicians care? Well, obviously Exxon and OPEC do not care. Politicians, at this time of our economic struggle, have to care. You'd have to be really out of touch not to realize that gas prices, now, have to be kept at moderate levels to get our economy up and running.
As I write this, President Obama is in the Middle East talking to many who are associated with OPEC. Most say he is there to deal with global issues regarding that region of the world. However, I believe, he also is there to address the rising cost of fuel and how they can make a difference in lowering prices. Let's hope I am right. Nevertheless, I hope someone takes an effective leadership role in a situation that seems to be spiraling out of control, again.
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