Remember how we heard during the campaign that producing more domestic oil would lower gasoline prices? Forget it.
The U.S. now produces more than half the oil Americans consume. The jump in domestic production from 2011 to 2012 was reported to be the largest ever. Global demand for oil is down, as many economies are jogging at best. Yet as The Post reported Friday, gas prices in Florida have risen 45 cents per gallon since January.
Some factors are predictable, just off-schedule. Refiners switch blends when spring comes, and it’s come sooner in many parts of the country. During that switch, refineries are out of production, which means tighter gasoline supplies. Other analysts say oil prices are determined even more by the world market, minimizing new U.S. production.
Another factor is also predictable. As in 2008, when gas prices hit nearly $4.25 despite the air coming out of the economy, blame speculation by investors. Bart Chilton, a former member of the Commodity Futures Trading Commission, says only 30 percent of the market is made up of traders such as airlines and utilities that actually intend to take delivery of the oil. Seventy percent is investors seeking quick profits.
Congress must rein in these oil speculators, as lawmakers such as Sen. Bill Nelson, D-Fla., have proposed All the speculators produce is pain for consumers and the economy.
for The Post Editorial Board