The war is going lousy, the economy is up in the air. Foreign policy is not so good and there may be a major leak in the White House to the press. Republican politicians all across the country are having their issues in their own states. What's the real misery in all this? Oil.

Oil closed today at $65.45 a barrel. Certainly not the highest but it's not so good either. Gasoline dropped a bit to $1.86 a gallon(that's at the stock exchange, not the pump mind you). heating oil (that's diesel and jet fuel too) closed at $1.81. The fall is fast approaching and the middle east certainly is not more stable.

The refineries have had their problems in recent weeks, Saudi has had problems, power outages in Iraq causing production to go down. The threat of hurricanes lingers and the prices at the pump are hitting $2.50+ a gallon. What does all this mean. The oil companies are having record profits for sure. Everyone's blaming the arabs even though OPEC currently pumps at nearly 100% production. They don't have anything left to pump. So...let's go back to the oil companies. Refineries have had problems and many say there's plent of oil, refining capacity is what sucks.

Now consider that refining capacity is less now than what it was 20 years ago. No new refinery has been built since 1976. Even though current refineries have more capacity to produce, it's still less than it was during the Reagan years. Some may blame it on tougher EPA standards but that's a load of bull. They could've set the upgraded while slowing increasing the price to cover costs but oh... that might hurt profit margins, especially now. I forgot how our current president and his father made their fortunes?

Now the oil companies have everyone bent over a barrel and they're squeezing their cahoneys while they do it. The price of everything is going up and some predictions go as high as $5 a gallon or more and $100+ for a barrel of oil. So where does that leave the average individual who has to drive 30-50 miles to work everyday. Gas prices have gone up by more than 50% in the last year. It's incredibly painful I'll tell ya. Who's got the money to buy a HYBRID. Sure, the president's new legislation has $3000 bonus for people who by them but most people can't go out and buy brand new cars on the one hand and on the other, there's not a dozen models in the entire country.

Not to worry though, as gas prices go up, oddly enough so does consumption. We've not hit that market ceiling yet. It will hit soon though when all the disposable income is one and we can't support that great free market, service economy anymore. That's thing about services, much of the money paid for services comes from disposable income.

Did I mention the price of natural gas is going up on supply worries. Better stock up on your methane converters, you're going to need them and about 30 head of cattle to pay for electricity and heat this winter.

posted by Stithmeister @ 10:22 PM
 
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