Gas Prices, Oil Prices, Libya, and Uprisings in the Arab World

As I'm sure many of you have noticed, drivers are being molested at the pump - again. Why can't oil prices do the same thing as Obama's approval ratings? Whenever somebody so much as sneezes between Morocco and India, the price per barrel of oil gets higher than Charlie Sheen. Not to downplay the uprisings and turbulence of the revolutions that have been going on these past few weeks, but we should really examine if there is any logic for the incredible surge in oil prices and the reduction in output.

The recent Libyan uprisings - and thank god, because who likes Muammar Gaddafi? - have caused a bit of sticker shock at the gas station this week. I did some checking. The International Energy Agency said that it estimates the Libyan crisis has caused a reduction of less than 1% in global production, or between 500,000 and 750,000 barrels per day. Okay, gotcha. So, since when does < 1% reduction in supply ~ 20% rise in price? If a store has 100 beanie babies left (alright, a bit dated of an analogy, I know) at $100 apiece, and one gets destroyed, do they charge $120 for the other 99? I'm sure the oil industry would like me to believe there is more that goes into it than that - but we've all passed 8th grade math...at least I assume Obama has, but he won't release his academic records, so we'll just give him a pass.

In light of this insanity, it seems to me that it's safe to assume some asswipe investor simply rode the scaremongering express to GetRichQuick Land. That is one of the fundamental problems with no Wall Street reform. I don't care about risk management - nothing great comes with no risk. What I care about is the fact that such a HUGE fluctation is allowed to occur, relatively frequently, in the oil market when something happens. Even the most inane, inocuous things that logically make no sense bear huge implications on oil prices from time to time. Remember when fewer than 10% of the Gulf of Mexico's refining capacity went offline for about a whole 3 weeks during the 2005 hurricane season, but prices increased dramatically? To be honest, I'm still getting over how oil can be 400% more expensive than it was 10 years ago, but people have lots of excuses for how that's possible, but people also have theories about how Elvis is still alive too. It seems drought, rain, sun, clouds, heat, cold, political stability and instability alike all cause volatility in the oil market. I think something else is affecting oil prices - graft.

I'm not going to begrudge the Libyans getting the form of goverment they want. I don't think Gaddafi is good for their country, or the world. However, I would like to point out that whenever America does something for the world, we get scapegoated and maligned. Take, for example, our 2003 Invasion of Iraq to introduce a little-known concept called Democracy, to help augment it more than just the foothold that the often maligned Israel provides for it. [Insert gratuitous bashing of Halliburton and 3rd party security contractors here]. The next thing you know, America is the most horrible thing to ever happen to mother Gaia since mankind started raping and pillaging her for her resources (as liberals would have you believe). Yet, it's too much to ask for the Middle East to maintain oil output to stabilize the global economic recovery. We can't ask them for anything - but if they have an earthquake tomorrow, be ready and happy to fork over tens or hundreds of billions of dollars. Have you noticed how Secretary General Ban-ki Moonbat of the UN condescends at us about our cowboy diplomacy, our fossil fuel consumption, and eveything else about us, except when he needs money? Please take a moment to look up Mexican President Calderon's latest pass-the-buck tirade, blaming us for not doing enough to help him solve his drug-cartel problem.

If the world isn't going to let us drill for our own oil, they should make sure they produce enough of it for us. Period.