Prices will always go up. It has nothing to do with supply and demand, catastrophic events, weather, shortages, or even China.

If there was a “shortage” then why have we never seen a gas station closed or “sold out”, they always seem to have enough to sell us at the price they want. Why is the demand for oil declining? Why is the International Energy Agency forecasting U.S. demand for crude to fall by 2%? At the beginning of April, there were 21,268,000,000 barrels in reserve, this does not sound like a shortage. Automotive News even ran an article showing that gasoline reserves on hand this summer will be at the highest levels since 1999.

“If you take the “fear factor” out of the oil market, all that’s left is the hard numbers—and nothing in the real world justifies oil’s current pricing. In fact, on Apr. 11, a Washington Post article on the current problems with the price of oil quoted Jeroen van der Veer, chief executive officer of Royal Dutch Shell (RDSA), estimating that the new flow of investment monies into oil rose from $450 million per week at the first of the year to $3.4 billion per week by mid-March. Once again, you’ve got the head of a major oil company stating that speculation—not market fundamentals—is driving the price of oil.”

Fear is the #1 factor. News stories always report mishaps and other events as the cause of the oil rise. The public anticipates a problem however the reserves are there to protect us against this, and the gas we see at the pump was purchased long long ago, so why would a news announcement this week affect our price at the pump today?

On April 7th, Reuters Online Service reported that oil had gone up another $3 a barrel, but near the end of that article came this line: “Ships along the northern end of the Houston Ship Channel, which feeds eight refineries in Houston and Texas City, were stopped by dense fog on Monday.” As could have been predicted, when the second week’s oil report came out from the EIA two days later, crude stocks had fallen by 3.2 million barrels. The result of Gulf Coast fog holding up oil deliveries was that on the release of the second oil report, oil prices again rose by $2.37

Full story at [Neftegaz.ru]