When Pigs Drive

Why you should be happy about the great high prices you're paying for gas.

Soaring wholesale prices, some federal officials say, just reflect a functioning free market sending the right price signals that will encourage producers, refiners, and shippers to rush supply back in to make up for what's been sidelined by Katrina. The armada of tankers carrying gasoline from overseas is evidence of that. The chief economist for the Commodity Futures Trading Commission, James Overdahl, says: ''Energy prices are being set fairly in an open and competitive environment."
The Boston Globe Scratching your head over the sudden run-up? Here's what happened

So there. If you aren't happy that gas prices are so high, then the terrorists have won. At this time of crisis, Americans should come together. Now is not the time to question the level of victimization we should expect from free market economy. We need to -
What? No terrorists? Oh. Ah. Um.
How 'bout that Gay marriage?
Saddam Hussein's on trial!
Woo hoo! Look over here!
Supreme Court vacancies....I've got vacancies.
Get 'em while they're hot!

I was a little bit curious about this. Where's the functioning market? Or rather, who is it functioning for? Not for me. Oil prices are down but so far the gas prices are still up up up.

Oil prices fell sharply Wednesday, extending a streak of losses as the U.S. oil industry showed signs of recovery from Hurricane Katrina and the international community tapped emergency reserves to avert widely feared shortages.
The Boston Globe Oil prices tumble as sector recovers

So in my ignorance I am wonering how come the gas is over $3.40 a gallon everywhere around here if oil prices are down? When are the gas prices going down? I looked into this online today and I thought I'd share the results here. Primarily, it seems that there are still "anticipated shortages" and that is one often cited reason for why consumer costs for gas remain high. I can't help feeling like the excuse of anticipated shortages is a little overused at this point. Do we have less oil now than we had this time last year?
Analysts surveyed by Reuters predicted a report from the EIA (Energy Information Administration) Thursday will show crude stockpiles fell last week by 8 million barrels due to Katrina, bringing them to about 314 million barrels. While that would be an abnormally large decline, stockpiles would still be well above last September, when stocks fell below 270 million barrels after Hurricane Ivan cut Gulf of Mexico production.
The Boston Globe Oil prices tumble as sector recovers
I guess not. Well we don't know about the oil refineries in the gulf. They might have all been lost.

U.S. gasoline prices appear to have peaked as energy operations in the Gulf of Mexico, clobbered by Hurricane Katrina last week, resume production. Other energy prices are also easing. Light sweet crude for October delivery fell $1.59 to $64.37 a barrel Wednesday on the New York Mercantile Exchange.
USA Today Gas price increases ease as gulf production up
Ok, this bothers me. We have more oil now than we had a year ago, we have production up (not all but much) and running in the gulf. The price companies are paying to buy the oil is down. But consumers are still paying high prices because someone somewhere thinks there might still be a shortage. Does that bother anyone else? Show of hands?

Yes, you folks in the back talking on your cell phones but raising your hands while you also check your stocks online. I'm sorry. I've forgotten all of your names already. Ah, you're the US Senate Energy Committee. That's nice. And so you are bothered about this? All of you...ok, well most of you at least. And you all decided to hold a committee hearing. How nice!
"The American people are being victimized more than any free market would warrant," said Sen. Gordon Smith, R-Ore., at Senate hearing on the impact of the hurricane on energy prices.
AOL News Senate Holds Hearing on Gas Price Gouging
Senator Smith, when you are done making paper airplanes to throw at Senator Boxer, maybe you can give the rest of us an idea how much victimization of the american people you believe is warranted by our free market.

Several news stories on the hearing made a point of stating that the Federal Trade Commission cannot regulate price gouging unless it involves antitrust/monopoly issues. If this were about someone buying up all the railroads, utilities, or the midpriced real estate, presumably they could intervene with a nasty Chance card. "Pay a windfall tax....NOW! (unless you really don't want to or anything because no one can force you to. No one at all.)"

Testimony focused specifically on why gasoline prices are so high while oil companies make record profits; with a longterm goal to hammer out policies about price gouging, unfair speculation and what Senator Domenici called "unconscionable profiteering."

"The Federal Trade Commission is not specifically subject to the jurisdiction of this Committee, but any oil company that is price gouging will find themselves in those witness chairs where they will be made accountable," said Domenici.
CNN Senator wants price gouging protection - Committee head wants to know why gas prices are so high while oil companies make record profits.