On Friday February 08 the lead on USA Today's Business Page headlined "Less Driving Could Mean Lower Prices". continuing "High prices and a slowing economy are leading consumers to significantly cut back on their driving, a development that could limit the pain at the pump this spring and summer".
Then the reporter went on to quote without comment nor insight a senior oil market analyst from the Energy Information Administration, the statistical arm from our forever somnolent Energy Department, "It's prices and the economy". And that's the rub. It's just isn't that simple as much of our media purports it to be, let alone the Department of Energy. On matters relating to the price of oil, the core factor in the price of gasoline, the key role of market collusion is rarely brought into focus. Thus the colluders slide by, largely unnoticed, free to continue their machinations without the public opprobrium which in time would hold them to account.
On the very day of the USA Today article, Bloomberg reported that the Organization of Petroleum Exporting Countries (OPEC) may cut crude production when it meets next month to keep the price above $80 a barrel. This would not be the first time nor the last that OPEC actions were meant to target price or price levels. The $80/bbl price level was alluded to more than a week before in the New York Times (please see "Exxon Rakes in Record $11.6 Billion Quarterly Earnings While Cheering OPEC's Readiness to Cut Production" 02.04.08).
USA Today's reporting is an example of what is deeply wrong with the medias education of the American public on how we have become the pawns of the international oil patch, most especially OPEC. Market forces, supply and demand, are no longer the sole price determinants even though that is what the oil industry and this administration's Department of Energy would want us to believe. USA Today should know better, should educate us to the true workings and reasons for the oil markets distortions rather than obfuscate the actual issues to the glee of oil industry flacks.