An article from the Minneapolis Star-Tribune on how the inflation-adjusted price of gasoline is not at a record high. Note his last quote from a source: “The market is going to take care of this.”
BTW, I agree with Kevin Brancato’s comment here last week, laying some of the responsibility for the economic illiteracy of the populace and of journalists at the feet of so-called “experts” like AAA. I think they should do a much better job of framing and contextualizing gas price changes than they do.
Jerry Taylor of Cato wrote a commentary decrying OPEC, laying out OPEC’s role in keeping oil prices high. He’s completely right. One interesting point that he makes is that cartel prices can be more volatile than normal market prices, which is going to mess with the heads of folks who are scared of markets because “they are volatile”:
Cartel prices fluctuate more because they are less certain than normal market prices, inviting speculation. In short, market agents are forced not only to consider global supply and demand but also to factor in OPEC’s behavior and its members’ fidelity to their promises. Hence, the market is less predictable and prices are accordingly more volatile.
Good point. I would only add that he should take into account contestability, and that potential competition from non-OPEC sources like Russia, Norway, Mexico and Canada are going to become increasing substitute supplies for OPEC oil.
OPEC’s meeting to decide on its strategy for next quarter takes place on Wednesday.