Wait! Don’t fill up your gas tank unless you absolutely have to! Reuters reports that worldwide oil prices fell nearly $2 a barrel today. The reason for the drop? US stocks of crude rose an unexplainable 6.9 billion barrels above the analyst predicted 100,000 mark.

Gas stocks were reported at 1.8 billion barrels, double the predicted amount, said the U.S. Energy Information Administration. While the International Energy Agency warned just last week that US reserves were barely ahead of summer driving season demands, and exhorted OPEC to up production, the cartel stood pat. It’s almost like they knew there would be a surplus in the US.

This gift from the ‘Oil Fairy’ aside, it looks as though we may see more record high prices over the summer, especially if the strike in Nigeria lasts for any protracted amount of time.

Ever helpful, OPEC announced that it may cut back both near-term production and long-term investments in oil production technology. “If we receive information that oil demand will be reduced, it is our right to reinvest our investment,” said Abdullah al-Badri, secretary general of the Orgaisation of Petroleum Exporting Countries

In what could be construed as a thinly veiled threat, Al-Badri went on to warn that if bio-fuels production is held up, “there would be a shortage.” Demonstrating a nearly prescient knowledge of current Senate proceedings, al-Badri said OPEC would, “it would object to the use of increased fuel taxes to finance alternative energy output.”

In other words, they’re going to milk the market dry and if we try to reduce our dependence on oil, they’ll retaliate with higher prices through reduced production. That’s the best reason I’ve yet heard for bio-fuels. Once the oil market is made irrelevant they can fade back to obscurity. Any old red-neck can be an oil-millionaire.

Be Sociable, Share!