There's a funny thing about gasoline and diesel/heating oil: most of us act as if there's a magical knob on the U. S. President's desk, which he can fiddle with at will. If prices go up, and we didn't vote for the guy, we blame him. If prices drop, and we voted for the guy. we thank him.
We are -- all! -- notably silent when prices climb under a President we like, or drop for a President we dislike.
There's no knob. There never has been. At best, a President is like a cheerleader on the sidelines of a football game: they can get you roaring, and perhaps that affects the final score, but the grunt and impact and long, lovely throws are all done by other people. A President can encourage or stop oil pipeline construction, but that's just a long, dry pipe, with no direct connection to your gas tank until the oil flows. It does affect the futures market in oil; but the forces that drive oil prices are complex, often at odds with one another (OPEC vs. non-OPEC producers, for instance) and not always strictly rational. The closer it gets to be a consumer product, the more market forces drive the price -- but the companies selling it to to you have made their own bets on prices, and which way they'll move. They always hedge their bets.*
Gas prices have dropped for the holidays. I'm not much minded to praise or blame the President; he doesn't even have to fill the tank of the cars he rides in. But I do have a mental image of Adam Smith on the sidelines, covering sheet after sheet of paper with notes, crumpling them up and throwing them away in increasing frustration; even the simplest explanation of fuel pricing gets into the tall grass very quickly, and from there into the weeds.
* Remember when crude oil prices briefly went negative? Yeah, gas and diesel price at the pump never even got close to that, because J. Random Oil Company knows they'd better have a cushion when things change. And it's true that we'd miss them very badly if they were gone.
BUILDING A 1:1 BALUN
3 years ago