America is rejoicing over the return of low gasoline prices after that nasty spike of $3 gallons. Cheap gas flows once again in the US, just how God intended. But don’t think of OPEC as a friendly petrol salesman whose heart breaks watching America pay out the nose for energy, or a crazy crude dealer slashing prices to get rid of new inventory. Less oil demand in the US has caused a surfeit of oil, which lead to falling prices at the pumps and less money for the OPEC. OPEC is alarmed enough to be “toying” with the idea of holding an emergency meeting so they can work out a plan to cut oil output by 4%. Just in time for Christmas: $80 barrels!
The US government is understandably “dismayed.” “We still need oil for sure. We still need all the oil we can get,” the US Energy secretary Sam Bodman said. Maybe he’s trying to bluff OPEC into not lowering their output, but the humble desperation seems all too real. OPEC is knows we’ll pay whatever they charge.
OPEC abides by its own economics: That of a monopoly. Oil isn’t a free market. If OPEC were based in the US, you can bet everyone involved would be in jail or (more likely) paying fines for restraint of trade violations. But OPEC has always maintained (and the US always agreed) that its cartel activities are essential for the stability of the energy markets. Well, that’s true… if by “stability,” you mean “gouging,” and by “energy markets,” you mean “oil addicts.”
In no way do I advocate that the US attempt to apply anti-trust laws to OPEC, or that OPEC be dissolved and oil become a free market commodity. (can you say “armaggedon?”) But this is one more example why the US really, really needs to get serious about divesting ourselves from the world energy market: So our Energy secretary doesn’t give wussy soundbites about the greedy whims of a foreign-run cartel.
