Even though we are still nearly twenty days away from the summer solstice, summer activities are in full swing. Majority of us probably caught the summer bug long before Memorial Day. Everyone is excited to think about the great shining outdoors, summer excursions, picnics, and barbecues. Something common for summer that may leave people a little less enthusiastic—rising gas prices.
Never fails, just as the vacation season picks up speed, the rates at the pump start creeping up. Oil companies love the extra boost from seasonal travels. Although this year other major holidays saw a loss when it comes to travel and tourism, there are still high hopes that summer travel will be strong. Many of us can probably say that our “mail boxes,” have had a few more invites that require a little extra drive to attend.
So it comes to no surprise to any of us that gas is on the rise, but the percent of the increase is rather astounding. In just two months gas prices have jumped 36% topping a barrel up above $64.00. OPEC has determined that the prices could rise to nearly $80.00 a barrel by the end of the year. For those of you doing the math—well lets not be depressing and actually list that percentage increase.
It seems from the articles around that OPEC is of course highly pleased with the turn of oil—no one expected otherwise, but the ferocity of which they are pursuing these figures is rather disheartening. Although I knew that gas companies and oil suppliers were opportunistic and generally looking to make a quick buck, I thought for some reason that oil prices were driven much more by the supply and demand of the global economy. As it turns out, artificial demand created by OPEC works fairly well too.
OPEC is sitting on storage tankers filled to the top—in hopes that later this year we will see an economic recovery. Once that occurs, they can release that oil without seeing a dramatic loss in profits. So even though supplies are up and demand is low—prices will continue to climb. Luckily for the oil companies, I doubt we will see too many people cutting back on their weekend trips, boating, etc. just to save some money.
Moral of the story—blow for blow, expect to pay a lot at the pump. If you are feeling frisky, take the bus, walk, ride a bike, or car pool. For those of you who live out in the country where its eight miles just to get into town—maybe your tractor is better on gas than your pick up truck!
eelliso1 is a contributing writer for projectgroupthink.wordpress.com. Get instant updates for this blog via Twitter: PGTblog.