After oil and gasoline prices continued their relentless march up earlier this year, it was nice to have some relief at the pump in May and June. However, since the end of June, prices of WTI crude oil is up over 15%, Brent crude oil is up about 25%, and retail gasoline is up over 7%. Oil and gasoline prices reached three-month highs last week and the Energy Information Administration (EIA) increased their 2012 forecasts of these prices.
There is no doubt that these higher prices will grab the attention of news outlets, policy makers, and the public. With this increased attention, political rhetoric regarding fantasies of governmental regulations and market manipulations will likely reemerge as catalysts to lower these prices.
The less likely scenario is increased awareness on the impacts that central banks, particularly the Federal Reserve, have on these petroleum prices by changes in the money supply.…
As mentioned in a post yesterday, Cato just published a rather encylopedic Cato Handbook for Policymakers. Text is due from contributing authors around August, and the tome is published in January to coincide with the arrival of a new Congress (or, when we’re on a four year cycle, at the beginning of the new presidential term). It’s a nice set of policy discussions and a handy one-stop-shop for what we think Congress ought to do on a number of policy fronts.
My energy chapter, submitted in August, coincided with the peak of the hysteria about oil and gas prices, foreign oil dependence, offshore oil development (“Drill Baby Drill!”), and rampaging congressional search & destroy operations to root out the speculators theoretically at the root of the price spiral. Hence, my essay was about why oil prices were going up and what Congress could do about it. …