black gold - texas tea

My family started in the oil business in the 1930s with filling stations and then with one of the "Seven Sisters" of the 1950s. My dad hired and mentored several of the top executives of the old Gulf Oil Corporation. In the 1980s companies I was involved in did some work in the oil patch in Oklahoma and I watched a once good friend from church go belly up by drilling a set of wells when oil was $20 a barrel and when the first came in, the price was $12 and that $8 differential was the turning point between profit and loss. He capped the wells as his obligations were tied to the price per barrel and unfortunately for him, it was just under $20 so each barrel that came out was costing him money.

In the middle 80s I had a passing business relationship with a Dallas wildcatter who was a fellow of no value whatsoever other than being a good husband and father but carried  with him the business morals of a snake. He swindled some poor farmer out of mineral rights as a "land man" - and if you don't know what this is, it is a guy who scowers the countryside buying up mineral rights...short form for you get to plow and graze on the surface but we own everything under 3 feet. Anyway, he hit the infamous "Sweetwater Field" and made a fortune only to loose it all because he knew nothing other than to be a land man.

In short, I've seen gas wars, oil fields and personal gain and loss.

Gas is $4. It will go higher. There is nothing that keeps prices at this level other than speculators who have future prices at a cost that sets the price at the pump. This isn't supply and demand at work.. It has nothing to do with supply and demand.  Never has, never will.

The weak dollar makes it easier and republicans in congress make it easier because they assign it off to oil drilling moratoriums in the Gulf and on the North Slope. Ahhh if only....well the "if only" is that easing either would have no effect on anything short term and only marginally, if at all,  long term and then only if speculator "A" who bought the oil at $110 for delivery in July (and that is the current July price) figures wrongly that Iran will be up in flames and the middle east cuts production, well...you figure it out but right now there is more oil available than there are gas tanks and $5.00/gallon is just over the next hill.

This is all stupid speculation. It is no one's fault. It is everyone's fault and the politicians are going to attempt to manipulate the facts to their own gain and we will suffer from the ignorance they shove on us.