I didn’t get into detail about supply/demand, alternative sources, blah, blah …

Plain and simple, the recent jump in prices is still below inflation-adjusted prices but the rapidity of the climb is what is of concern, not the actual final price. I know how the market works but the average Joe and Jane haven’t become accustomed to this relatively high price this soon and this fast.

As far as the inflation excuse goes, it makes me feel better while I read the article, then I get mad too. With that “excuse” shouldn’t we be pissed off and demanding that bread only cost 5 cents a loaf? The problem with the inflation idea is that EVERYTHING costs more, so it still hurts to pay the high prices.

What we need to face now is that things are not going to get better, and prices will never go back to $1 a gallon.

Sorry, as much as everyone hates Bush, oil price is determined by Supply and Demand. And that cost per barrel is the same in the States as it is in the EU. But you’re not completely wrong, politics do wreak havoc on the futures market and somewhat on the demand.

#2 – you’re right drilling and refining techniques have vastly improved over the last 30 years, but that just increased profit margins (as you’ve seen in the last year), that has no bearing on the demand, maybe the supply, but demand is out pacing it.

And Ethanol? Serious? It’s much more expensive (right now) and there’s huge shortage in The US (coupled with protectionist tariffs), plus its MUCH less efficient than petrol.
Bottom line: Ethanol currently costs you more money for less energy.

But first, If the price is high enough they’ll drill on Martha’s Vineyard and Naples FL … FOR SURE: commies (planning an attack on Brownsville) will be discovered in Venezuela and it will become the 53rd state and the name changed to Exxonia.

Shortly thereafter, someone will re-discover Syn-Diesel or methanol (probably a Chinese company because we’ve become engineering slackers..) and Saudis will be back to riding camels. …’till then bring me a 2L diesel in an attractive SUV body.

j i m

As #6 said, we need the higher prices so that CONSUMERS demand other sources of energy, so that there is enough interest in researching and finding cost effective alternatives.
All the political “solutions” are short-term vote whoring solutions. Higher prices will do what they preach, make us reduce consumption and preserve. The higher prices will also make us focus on new and other technologies. Go read about what happened when the Whaling industry had nearly wiped out whales and whale oil (THE primary source of fuel) became so expensive that NO ONE but the rich could afford it. New fuel sources were researched and found ONLY because there was a demand.

And, that is very good. We don’t need competition amongst oil companies, we need competition amongst energy suppliers. A broader source of energy is good for the market and will help drive innovation and efficiency.

Captain America: Yes, in the last 30 years drilling and refining technologies have greatly advanced, but the feedstock being used as the input is diminishing (supply) as the demand has concurrently rapidly increased. Please go and do Economics 101 on supply and demand to understand that your statement requires no change in feedstock supply or end use demand. You may also be comforted to know that because of the high prices for oil, more oil fields are coming online (either new or mothballed) – but only because the margins required by the company, and ultimately the shareholders who own the company/companies, are being met.

If things gradually increased, there would be an “acclimatization”. What we’ve experienced is a doubling of price in the span of a few years.

Price shock cannot be dismissed by the argument of underinflation.