It Must be Winter – U.S. Consumers begin to feel pinch from Increase in Fuel Prices – OPEC seeks price-setting at $100 Barrel.

OPEC, $100 per Barrel on the table - image Latest News

When the need for fuel increases during the winter (heating) and summer (anticipated vacation bound drivers), the price of fuel appears to increase with demand. As January approaches, the price at the gas pumps has risen to over $3.00 per gallon, or up 7 cents in a week. (Reuters). Meanwhile, OPEC is, once again, asking for an increase in price per barrel, up to $100 Saudi Arabia wants pricing set at approximately $75/per barrel, while Libya, Iran and Venezuela prefer the higher price per barrel. This is causing some anxiety amongst oil importers such as Japan, and, yes, the U.S. (Bloomberg).

OPEC has historically toyed with the vast wealth of oil at its disposal, during the 1970’s, under the Ford, then Carter administrators, Carter, when pressed by rising OPEC prices, fixed prices in the United states, which resulted in an embargo and subsequent gas lines at the pumps. (Milwaukee Journal Sentinel, March 1st, 1974). Carter’s response was to offer a tax on U.S. consumers in order to manage consumption which ultimately failed to pass the Congress. (Washington Afro-American). Additionally, always attempting to tax his way out of a problem, Carter, instituted a “Windfall Profit Tax on “Big Oil”, which resulted in a backlash of fewer barrels of oil being refined in the U.S.

With President Obama reading Reagan’s blueprint for a productive nation, perhaps he’ll pick up on the Reagan Plan of drilling both offshore and in Alaska to boost production crippled under Carter. (Merced Sun-Star).

He might want to get a few pointers from the former Governor of Alaska, who trimmed $231 Million from the Alaskan budget, and then went to battle with Oil Companies to boost production

Palin, during her tenure as Governor of Alaska,

1) Created Alaska's Petroleum Systems Integrity Office to oversee maintenance of oil and gas equipment, facilities and infrastructure, and a Climate Change Subcabinet to prepare a climate change strategy for Alaska.
2)Passed major legislation that began a competitive process to construct a gas pipeline and overhauled state ethics laws.
3)Served as chair of the Alaska Oil and Gas Conservation Commission. (National Governors Association)

Palin also served as Chair of the NGA’s Natural Resource Committee

With a new move to the middle by the Leader of the Free World, all things may be possible, but it remains to be seen whether he will follow the lead of Carter or take advantage of a Tea Party Congress and it's hero's and heroines: Reagan and Palin

Tuesday Tidbits

Oil



Hillary Clintons proposed gasoline tax holiday and her stance on Opec are being criticizedby those on both sides of the political spectrum. That said: to those of us paying at the pump, Ms. Clinton is making sense.

As oil prices continue to climb to $120 per barrel and oil companies are reaping what can only be viewed by those of us paying through the teeth for heating oil, at the pump, and the grocery store (where prices are being driven up due to high cost of trucking), as obscene. When one sees the headline: Chevron Profits first quarter, at 5.17 billion Yahoo Finance, the thoughts of a windfall profit tax on oil companies, as proposed by Hillary Clinton, makes a whole lot of sense. Although economists will argue that this type of corporate tax (a tax on the excess profits only), will cause shortages, and worse, the oil companies may not continue research, those of us in the real world might view the pain of a corporation giving up a percentage of 5 billion plus in profits, as just. Point of view, as a citizen of the State of Massachusetts, my payroll taxes on my meager salary are taxed at 30% (includes federal and state taxes, as well as Medicare and social security), is it not fair that as an American corporation, Chevron bear part of the burden as well?

Best line regarding Oil companies this past week: Hillary Clinton to Bill O’Reilly: “Well, they aren’t inventing anything new (paraphrased via memory).

It should be pointed out that John McCain and Hillary Clinton both support a gas tax holiday. Obama, does not.