Record Gas Costs and Price Manipulation

AP just ran a piece titled "Summertime Blues for Drivers: Gas at August Record."

ANTONIA JUHASZ, antoniajuhasz at gmail.com, @AntoniaJuhasz
Juhasz is an oil and energy analyst, author and journalist. Her books on the oil industry include The Tyranny of Oil. She is an investigative journalism fellow at the University of California, Berkeley Graduate School of Journalism. The Los Angeles Times recently published an op-ed of hers on the Chevron refinery fire.

Juhasz said today: "Price manipulation is driving rising gasoline prices, not supply and demand fundamentals. In California, gasoline production increased by more than 12 percent in the week following the Chevron refinery fire as other refineries increased production. At the same time, gas prices increased dramatically driven by price manipulation. Big Oil and energy traders, who are often one in the same as every major oil company (with the possible exception of Exxon Mobil) reports in SEC filings engaging in speculative energy trading, are manipulating consumers.

"According to the U.S. Energy Information Administration, nationally, U.S. crude oil stocks are higher now than they were at this time last year; U.S. oil production is at its highest levels since 1998; more gasoline was supplied nationally last week then at any time since July 2011; and overall U.S. gasoline consumption is down. In fact, U.S. oil companies are increasingly exporting oil and gasoline produced here out of the United States to furnish other markets. Meanwhile, globally, crude oil production is up from this time last year as global consumption slumps. Manipulation, not supply, is the problem.

"Increased oil production, the release of oil from the Strategic Petroleum Reserve, and building more gasoline refineries will not affect gasoline prices. Instead, increased regulation, oversight, and enforcement of how gasoline prices are set at the pump and, even more importantly, energy futures markets, are the best tools for affecting price.

"Gasoline prices should be high and probably much higher than they currently are to account for the externalities of oil and gasoline usage. But rather than put this money into the already overstuffed pockets of Big Oil, governments should capture it to invest in meaningful alternatives to make us far less dependent on our cars and provide a massive jobs program while they're at it by investing in increased, more affordable, and more convenient public transportation."