MostlyGeek

I don’t get it. Why didn’t the President come to Canada to talk to Stephen Harper about the price of oil. Canada is the biggest exporter of crude oil to the United States. That’s right, Canada is #1, Saudi Arabia is a not so close second.

It would make sense to talk to the #1 source first before talking to the #2. This news article, Canada tries to cool oil prices, has some good information. It say that while Canada is the #1 exporter for the United States it only has about three percent of the World’s oil production. Yet we sit on fifteen percent of the World’s oil supply (yay for us).

For most of us, what we’re really concerned about is the price of gas at the pump. This is a whole lot different than the cost of crude oil. There is refining, marketing, futures, contracts and a whole bunch of other things in the middle before a barrel of oil gets into your car as a liter of gas. The Consumerist has a good featured article, Why Is Gas so Freakin’ Expensive, which summarizes a meticulous 324 page researched report how gas prices are set. The report, Gas Prices: How Are They Really Set? is available in PDF form.

In a nutshell The Consumerist’s report says gas prices are set in a complex matter of futures and contracts. What that means is the Saudi’s aren’t blowing smoke. Speculators are driving up the price of gas. The demand by countries like China and India are driving up the cost of gas. We (everybody) are using too much. Supply and demand.