Oil Prices Are Soaring and OPEC Can Do Nothing

Oil prices increased this week to an all-time high of $57 a barrel (not adjusted for inflation) and predictions suggest it could be as high as $60 by summer. Translate that into gasoline prices -- the current nationwide average regular price is $2.05 a gallon, and may be as high as $2.75 by the peak driving season this summer.

Economists say that American auto manufacturers may be hit the hardest. In fact, both GM and Ford are reporting surplus inventories in their SUV categories, and as gas prices increase experts predict that more people will move to buy fuel-efficient or hybrid vehicles.

OPEC announced this week that it would increase production by 500,000 barrels of oil per day (most of that to come from Saudi Arabia). Even after the announcement, gas and oil prices increased by the end of the week. Forecasters point to the high worldwide demand for oil, particularly in China where there is an on-going effort to create a 750 billion-barrel strategic reserve.

The U.S. Senate essentially voted this week to permit drilling in the Arctic National Wildlife Refuge (the official vote is yet to come, but a procedural vote this week cleared the way for the official vote) and the House will in turn act soon open ANWR to drilling. Of course, the problem with opening ANWR is that at least ten years of development, construction, and drilling will have to occur before the U.S. sees any actual production results. Yes, you read that correctly--TEN YEARS that we could be making automobiles more efficient, that we could be improving our use of alternative fuels, and that we could be working to decrease our dependence on oil. Instead, we are relying on our oil President and oil-friendly Congress to make their friends and relatives in the oil industry richer by allowing them access to one of the last pristine wilderness environments in the United States.