I consider myself something of a smart guy, someone who can see “A” over here and “B” over there and eventually put them together to figure out “C.”
That doesn’t make me a genius, and I’ll admit that some of the real high brow stuff can still fly fairly far overhead.
That puts me somewhere between figuring out how the toaster works while solving a morning Sudoku puzzle and figuring out how nanoparticles work.
But for the life of me, I can’t figure out what leads to the price of a gallon of gas at any one moment, in a system that seems to defy the law of gravity as easily as the law of supply and demand.
You see, it’s not just the price we pay per barrel of oil, although that has doubled in the last year or so.
It’s not just the tax structure that works on the theory that those who use the roads must pay for upkeep and everybody who uses the road uses gas.
It also has to do with futures markets and speculators, not the cost of today but the anticipated cost of tomorrow.
It has to do not only with the weather, but also with the threat of weather as people have to charge more if it LOOKS like a busier than usual hurricane season MIGHT reduce output from the Gulf.
(By the by, if the hurricanes don’t show up then why don’t we get the money back?)
And, in a truly lovely chicken-and-egg argument, the price of gas is affected by the cost of transporting the gas, so if the gas in the tanker costs more we pay more to move it so it costs more.
Okay…
So when the Saudis announce increased production the experts say it won’t matter much.
I thought when the supply goes up the price goes down, or am I missing something?
That still-mysterious volatility has led to some sweeping changes in short periods of time, like the time the gas jumped a dime a gallon in the space from when I stopped my car to the time I put my hand on the nozzle.
Yet magically, just when gas reaches the psychological barrier of $4.00 a gallon in our area, the price point where people may start making real changes in their habits, the price freezes at $3.99 a gallon and stays there for three weeks now.
Like I said, I may not be a genius and I may not understand the complex forces that create the price for a gallon of gas at any one moment in any one place.
But answer me this:
Does anybody else feel like they’re being played?