On Friday July 24th oil futures completed a three week rise that saw prices top out above $68 per barrel. Gains on stock markets have helped refurbish balance sheet losses and spurred more trading in commodities like oil. These gains have also fueled consumer confidence, leading to increased demand, and eventually higher prices.
The global economic slowdown, which was kick-started by declines in the U.S., is showing signs of waning in countries around the world. Economies in Europe, Japan, China, India and elsewhere will soon return to their insatiable lust for petroleum. When they do, prices will have only one way to go - Up.
The world's most oil-addicted economy - the United States - is not seeing the recovery that is being trumpeted around the globe, but it will pay the price for it. Rising prices mean more difficulty at the pump for Americans.
AAA's FuelGaugeReport.com, which lists prices for every state, showed the first rise in national gasoline averages in over one month when its statistics were updated Monday July 27th. AAA listed another slight increase on July 28th, marking the official end of declining gas prices.
Considering the fact that we are already paying 30 percent more on our gasoline than we were last year, we should expect rapid increases in gasoline prices in coming months.
Furthermore, with demand expected to heat up throughout 2009 and 2010 there may be no end in sight for price increases. It may be a long time before we get back to last July's peak of $147 per barrel of crude, but the return of $4.00 per gallon gasoline may be just around the corner.
The news covers the day-to-day updates of commodity prices and trading volumes. Unfortunately it never states the fact that this country cannot continue living off of oil as its primary energy resource.
Regardless of the fact that the vast majority of oil comes from abroad and contributes a huge proportion of our annual trade deficit, oil is a toxic, expensive, and diminishing resource. Rather than struggle through rising prices, or crises such as last summer, we need to move away from oil altogether. We need something cleaner, more reliable, less expensive, and most importantly homegrown. This is asking a lot, but it is also the only option.