I was beginning to think about the price of crude oil the way I do about rent: It never goes down.
This past Wednesday and Thursday saw the barrel price of light, sweet crude oil rise to and above $100 for the first time ever in the New York Mercantile Exchange, even though any sane human would probably err on the side of caution when it comes to buying crude oil futures.
Market indicators — India and China are looking to use less oil as the price soars, the value of the U.S. dollar is dropping like a brick in a pool, there is geopolitical turmoil in oil producing nations, and fears of a U.S. economic recession — suggest that the overpriced barrel of crude oil is a bubble ready to burst, like Kramer’s oil filled rubber ball in that “Seinfeld” episode.
So why did the price of crude oil break the century mark last week?
Well, according to numerous financial news reports out of New York and the United Kingdom it is because of some guy named Richard Arens, a New York broker who specializes in crude oil. He made a bid to purchase 1,000 barrels of crude — that is the least you can buy at one time — for $100 each. He then immediately sold them for $99.40, for a loss of $600.
The speculation is that Arens wanted to cement his place in history as the first to throw down a Benjamin for a barrel of oil.
I know what you are thinking: What do I care if some jackass in New York wants to blow $600 on a meaningless historical mark.
Well, you should care because crude oil makes up about 60 percent of the gasoline our automobiles chug, and the soaring price of a barrel of crude hits us right in the wallet, whether it’s paying for gasoline or food that is trucked into Las Vegas.
The increase in the price of oil is insane. During the past five years, the price of crude oil has quadrupled. In 2007, crude oil prices rose 50 percent — to give you an idea of the craziness, it broke $80 a barrel for the first time … in September.
Analysts have touted a number of factors as to why the price of crude oil has risen, note my list above, but a lot of blame needs to be placed on commodity brokers and futures speculators.
After Arens’ bid for a slice of meaningless history, the price of a barrel of oil settled below $100 on Wednesday. But on Thursday, before anyone knew what Arens was trying to do, the price of crude oil jumped to $100.09, another record high.
If those investors had known what Arens had done, would anyone have offered to buy a barrel for more than $100? Probably not.
On Friday, the barrel price fell to $97.91.
In case you are wondering, The Associated Press reported the price of a gallon of gasoline rose 2.2 cents Friday.
Meanwhile, as I watched the presidential candidates make their speeches Thursday night after the caucuses in Iowa, I began to wonder why I didn’t hear any of them talk about this issue considering it has a direct effect on all of our lives.
And just so you know, the federal government’s Energy Information Administration predicts the nation will see record-breaking gasoline prices again in the spring.
It will be up to us to deal with the problem, and that means finding ways to spend less on gasoline. Here are some tips from the driver advocacy group AAA:
• Inflate your tires to the proper pressure because it changes with the seasons.
• Don’t speed, especially on surface streets where you are more likely to expend more fuel by speeding up and braking frequently.
• Make a list of errands and do them at the same time on the shortest possible route.
• Ride a bike, walk, take a bus or car pool.
• Make sure your vehicle’s fluids and filters are clean.
And you can find the station selling the cheapest petrol before leaving your house on the Internet using AAA’s Gas Price Finder at www.aaa.com/gasprices.
Hit n’ Run
I saw this license plate frame on a car parked at a local casino: “Think you’d driver (CQ) better with that cell phone up your (expletive).”
With spelling like that methinks you’d better have gotten a discount on that license plate frame.
If you have a question, tip or tirade, call Francis McCabe at (702) 387-2904, or send an e-mail to roadwarrior@review journal.com. Include your phone number.ROAD WARRIORMORE COLUMNSDiscuss this column in the eForums!
The Las Vegas Valley Water District will install a pipeline on Desert Inn Road, from Rainbow to Jones boulevards, beginning Monday. Motorists can expect disruptions and lane restrictions on the eastbound lanes of Desert Inn through March. Commuters should use Spring Mountain Road or Sahara Avenue to avoid the construction.
The right lane on Tropicana Avenue, between Island and Duke Ellington ways, will be closed from 9 p.m. Saturday to 5 a.m. next Sunday so crews from the Nevada Department of Transportation can repair a pedestrian railing.
A freeway ramp meter will be activated at the U.S. Highway 95 southbound onramp at Eastern Avenue between 6 a.m. and 9 a.m. This ramp meter is already active from 1:30 p.m. to 6 p.m.
A ramp meter is a red and green traffic signal that controls cars merging onto the freeway. Failure to stop when it is in operation is a traffic violation similar to running a red light.
Paving and storm drain work on Centennial Parkway at Durango Drive, should wrap Thursday, according to the city of Las Vegas public works department.
Road improvements on 28th Street, between Stewart and Sunrise avenues, is expected to finish Jan. 19, according to the city of Las Vegas public works department.