Our friends at The Economic Populist make the case that Libya sells us 2 percent of our crude oil. So civil war in Libya can't possibly explain why gas prices are soaring. Writes the EP
The general explanation points to the crisis in Libya as the proximate cause.
The anti Gaddafi regime revolution began in earnest on February 17. But if the Libyan revolution were the cause, we'd have to attribute a 50% drop in a 2% share of the world's oil supply as the cause of the panic. We would also have to attribute the increase in US gas prices to a nation that doesn't impact the US crude oil supply and, as a result, should not impact the price of gas here.CBS, to its credit, doesn't buy the argument that Libya is causing high gasoline prices. Yesterday the CBS Evening News quoted Sean Cota of the Petroleum Marketers Association of America, who said
...it's unbridled investment money that is dominating the market, to the point where supply and demand doesn't matter anymore.
Cota said pension and hedge funds have been bidding up the price of oil. Last week, two-thirds of all oil traded was sold by investors, not oil companies. Cota said
The total world energy supply is bought and sold everyday about eight times.And what our elected officials doing about this problem? They're talking about tapping the strategic oil reserve.
Thank you.
Economic Populist remembers when a president stood up to big corporations. It was a long time ago. Read the whole thing here.
