CA Should Rethink the Benefits of Ethanol
Posted: June 15, 2009
Gas Prices Soar: Summer Has Arrived
California’s average price for a gallon of regular gasoline topped $3 today for the first time since last fall, driven higher by a rally in the market for crude oil. A rally apparently driven by spastic investors rather than demand. Just one month ago, Californians paid $2.52 per gallon, according to the AAA auto club, and they still should be based on lagging demand.
San Francisco’s average hit $3.09 today, according to AAA. Oakland reached $3.01, and San Jose, $3.02. The oil price wave should push across the U.S. soon but while it batters California, perhaps biofuels supporters should bask in the moment. Who better to get thumped by imported petro prices than the West Coasters who recently ignored science and passed questionable guidelines that have put a chill on the previously burgeoning domestic biofuels industry.
Gasoline prices usually rise through the spring and peak in the summer, as Americans take to the road on vacation. But this year prices are rising despite slower gasoline sales. Last year’s historic price spike reached its pinnacle on June 19, when California’s average price for regular hit $4.61, a record. Then, prices crashed along with the global economy. They have now rebounded as market speculators seek any port in the economic storm.
Since late April, traders have bid up the price of crude oil, gasoline’s raw material. They’re betting that the economy has hit bottom and will start improving this year, driving up the demand for fuel. And with the dollar struggling against other currencies, big institutional investors have used oil as a relatively safe place to park their money.