Tightening the noose
It should come as no surprise that the reprieve from the high gas prices of the Hurricane Katrina era is at its end. After falling back from a high of $71 a barrel, prices are almost back up to their former high, closing at over $65 a barrel yesterday.
I think we have seen the last of consistently sub-$2/gallon gasoline. And prices starting with “2” might just be a passing fancy on the way to something higher.
Why? Supply and demand dictate price. The world’s never-ending lust for oil coupled with the tightest spare production capacity ever seen makes for a volatile market that can’t go anywhere but up.
Global disruptions in the oil market from natural disasters or wars are one thing. But when a single country – let alone a group of militants – can cause such a rush on the market, things are in pretty bad shape.
