Jimmy McMillan, who claims to be Irish, has started a new campaign using a variation of his slogan “Rent is too damn high!” in order to lower gasoline prices. It’s comical to watch his YouTube video taken in front of the White House but he makes his point:
His formula: More Drilling = More Gasoline = Lower Gasoline Prices
Consumers are once again being told with gas price stories we see on TV and read in newspapers gas prices are too high and much worse now than they have been in the past. But gasoline consumers have short memories and will forget the details once the pump prices start going lower again.
Gasoline prices are unlikely to go back down as fast as they went up with the Middle East North Africa unrest continuing, the fallout of the Japanese nuclear plant meltdown not yet determined as well as the constricting requirements by the US Environment Protection Agency creating boutique gasoline in parts of the country with air pollution.
Crude oil is selling for around $96 dollars a barrel but we can all remember when oil was over $100 dollars, even $120 and $140 dollars a barrel not too long ago.
West Texas Intermediate (WTI) crude oil located in Cushing, OK was the financial benchmark used in the past to set the price for virtually all global oil pricing. At the beginning of this year it was replaced with the Brent crude oil posting on the Intercontinental Exchange of London. The WTI price is now disconnected with crude oil markets and does not represent the “real” price of crude oil.
Cushing is filled to the brim with supply and because it is landlocked and difficult to ship incoming crude further south to the US Gulf Coast refineries. Financially, the WTI contract is good for trading by index investors, ETF’s, energy hedge funds and individual traders, all going long in a market betting on crude prices to go back up.
Is gasoline is too damn high? And what are going to do about it is not as simple as the slogan Jimmy McMillan invented. The answer is we need a National Energy Policy to give us long term security from world events playing havoc with the price we pay at the pump.