Let The Speculation Continue
On Friday, crude oil set a new inflation adjusted record of $139.12 per barrell. As expected, the stock markets and many of the industries directly effected by this increase reacted violently to the news. Many sources blame speculation for the most recent round of price increases. To worsen the situation, these increases show little signs of stopping.
Oil is the lifeblood of the world’s economy. If deprived of it, industrialized nations would wither and die. At record high prices, transportation and manufacturing are easily the hardest hit. The cost of raw materials for manufactured goods is surging on a grand scale, causing price increases across the board from food to laundry detergent and even paper towels. Some manufactures are working to absorb the costs any way they can, while others are left with no choice but to pass the costs on to consumers.
For many, the financial sting of grocery shopping may seem trivial when compared to the pain inflicted at the gas pump. Americans everywhere are taking whatever steps possible to minimize fuel costs. The days have long passed when consumers could claim up to 5% on fuel rebates simply by paying with a credit card.
While most companies (airlines in particular) are seeing red, soaring oil prices have had a slew of positive benefits to our economic future. Automotive manufactures everywhere are working double time to maximize the fuel efficiency of upcoming car models. Public transportation ridership has risen to a 50-year high. SUVs are depreciating like sub-prime mortgage securities and hybrid cars can’t be produced fast enough.
Oil’s high price is causing radical changes in consumer behavior and is fundamentally altering the way we view energy consumption. In cities all across America, people are choosing to bike to work, walk to lunch and carpool with their coworkers. The smallest and the most fuel efficient vehicles on the market have taken precedence over their gas guzzling brethren. Domestic and international airline ticket prices are causing people to rethink their family vacation plans and opt for local destinations.
These sweeping changes may be painful adjustments but over time they will help us to reduce our dependence on foreign oil and force environmental issue to the forefont. Out of the chaos a clear winner has emerged. I only hope America’s new found rationalism will continue for years to come. The environment may eventually thank us for it.
