Pensieri di un lunatico minore

Less oil, more money

This just can’t be a good thing:

Oil company BP has indefinitely shut down the nation’s biggest oilfield after finding a pipeline leak, removing about 8 percent of U.S. oil production and stoking fears that already high gas prices will shoot up further. [...] Once the field is shut down, BP said oil production will be reduced by 400,000 barrels a day. That’s close to 8 percent of U.S. oil production or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.

Given oil prices are still climbing, I imagine this will cause them to shoot up even more. A 10% increase is easy to imagine, which will put light-crude over $80/barrel, and potentially send gas-pump prices up to $4/gallon.

It’s obvious, to me at least, that gas-pump prices have nothing to do with crude-oil prices, but instead, simply use crude-oil increases to push up the pump prices faster. Sky-rocketing profits by all the oil companies demonstrate that they are making more money on approximately the same amount of production, so the margins must be getting bigger.