Gambling with oil, and how we can counteract it

By John Toth
Bulletin Publisher

I bought a few gallons of gas the other day and could have sworn the price was going up while I was pumping it.

I felt like I should take a picture of this precious commodity. It is getting so expensive, I should be pouring it into the tank from a silver chalice.

It’s the same gas we pumped a month ago, coming from the same oil wells, the same refineries, and the same gas station. The only difference is that the price of crude oil is going up.

It’s 2008 all over again? No, it’s worse.

The price of gas this time in 2008 was 40 cents less than right now, according to That means that by July gas will be at $5 a gallon if this trend continues.

In 2008, speculators who are using oil as a gambling chip (except that it’s a sure bet) did not have anything to blame. The increase just happened because speculation made it happen. Today, speculators have the Middle East situation, Japan – perfect props.

According to the latest Department of Energy Report, there is plenty of oil available worldwide, and refineries are running at 81% to 89% capacity. Crude oil reserves went up by 2 percent last month, while gas use dropped. There is no shortage anywhere, and no fear of a shortage.

The longer oil is not allowed to reach its natural free market price, the greater the danger that we’ll slip into another recession. If people are afraid to spend because those larger than life numbers on every street corner are increasing daily, and if they stop buying new things, the recovery cycle slows down or stops altogether.

Oil should be off the table as a commodity. It is the engine that makes everything else run. There should be no gambling allowed with oil futures.

Oil is not like coffee futures. Gamblers who raise those prices because of crop reports, or whatever other measuring sticks they use, are not endangering the economic well being of entire countries.

We can stop drinking coffee. But lack of oil, or very expensive oil, can destroy countries, even this country. There is no practical alternative to oil right now.

Alternative fuels are not good enough yet, and there is not enough for everyone. So, we need oil. We can drill for more, of course, but everyone also needs to work together to solve this problem.

It starts on an individual level by letting gas consumption sink even lower. When we all conserve fuel, a lot of little steps add up to giant leaps as a group. That’s the only chance we have right now to stop the gambling, since our leaders on both sides have been bought off by Wall Street and industry lobbyists.

We’re making fewer trips by grouping them, riding together as much as possible, and driving slower. We shop locally as much as possible. We shop on-line for items that we cannot get from local merchants, and have them delivered to the house.

I checked my old van’s tire pressure the other day, and all four tires were around 25 psi. The ride was smooth, but at that pressure the car uses more gas than at 32 psi, or whatever your car manufacturer’s recommends. The average savings is about 3.5 percent.

My European friends are feeling the pinch also. The last time I checked, gas in Spain was $8.05 per gallon after converting the currency and changing from liters to gallons. However, Europeans on the average drive smaller cars that get a lot better miles per gallon than we do. They also start at 95-octane gas and go up from there, which provides better fuel efficiency. A lot of their gas costs are because of taxes, which fund public transportation. And, they also have shorter distances to cover than we do.

So, we have the worst combination here: Little or no public transportation; longer distances; larger cars; and lower octane fuel.

But, we can improve a bad situation by making some small changes in our daily routines. The money we save stays in our pockets. We can ride out this wave of greed like we rode out the last one.