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Oil production in the US at 14 year high, but gas prices don't go down

lambert's picture
Submitted by lambert on Tue, 06/12/2012 - 11:51am

Gee, that's odd.

It’s almost like gas prices and production aren’t linked at all, which we know not to be the case because the fossil fuel companies, who have an economic stake in drilling more, say that they are.

Because they can!

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shargash's picture
Submitted by shargash on

I'm not sure what point you were trying to make with your post, but what I inferred from your post is the opposite from what I got out of the Grist article.

The reason: Gas prices are linked to the price of oil, not production. Oil is bought and sold in a massive global marketplace, in which U.S. production is just a small percentage. It’s like if you sold your home-squeezed orange juice alongside mass-produced Tropicana. Even if you double your production to three gallons a day, that’s not going to reduce the price of orange juice in the grocery store.

I think the Grist author was saying that oil companies are lying that drilling will bring down oil prices, because there isn't enough oil left to drill in the US to have an impact on global prices, but there is enough oil for the oil companies to make a profit from drilling.

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