The second greatest jump in regular gasoline at the pump has occurred the last two weeks. The jump has been 33 cents a gallon.
“The oil companies are not the culprit, they are the beneficiary,” said Don Good of the Good Oil company in Winamac. “They benefit from all this and I don’t think that you’ll find the oil executives sitting around the table crying over $100, $130 crude because they will just make a lot of money off of it. They aren’t the ones driving that market, but they’re more than happy to ride along.”
Everyone is talking about gasoline prices. We’re seeing oil prices rise and we’re hearing about $150.00 for a barrel of oil when we don’t really see signs of a robust recovery. Is there a reason behind these increases?
Don Good of the Good Oil Company in Winamac explains the prices at the pump.
The oil price closed at $91.50 a barrel in Wednesday’s market. That prompted a call to Don Good from the Good Oil Company in Winamac.
“They took a little spike over the unrest in Egypt and the Suez Canal comes through there and that’s a big concern as far as shipping oil out of the Gulf,” reported Don Good. “There’s also a major pipeline that runs through Egypt called the Suez Pipeline and it’s a concern there that it may be impacted if the violence goes that way. I think a bigger concern there is it could destabilize the Middle East, particularly Saudi Arabia. Their fear is that if it spreads there, that’s where we’ll really have a problem.”
Gas prices spiked ten cents this week when prices hit $3.19 a gallon.
“We’re kind of seeing a little bit of a combination of things when it comes to crude oil prices,” said Don Good of the Good Oil Company in Winamac. “It’s combination of the weak dollar, we’ve kind of talked about that crude oil is valued in dollars, so when we do something in our economy that makes the dollar weaker, like the $900 billion tax relief plan that added to the deficit, that made the dollar fall. Since the dollar is the currency that they value crude in around the world, it makes crude oil more expensive for us and less expensive for other countries. India’s and China’s economies have really picked up. I think they’re running at about a six or eight percent increase compared to where we are struggling. As a matter of fact, China just passed us as being the largest consumer of petroleum in the world. They’re consumption of oil is going up while ours is pretty stagnant. Right now the markets are focusing on their use than ours.”
