The tradition continues. And it’s costing you money.
Every year at this time speculators in the financial markets attempt to push up the price of gasoline — using the excuse that we will soon enter the “peak driving season.”
Ordinarily, peak driving in the US starts Memorial Day weekend — which begins on the afternoon of May 27 this year — and continues until Labor Day.
In normal times, it makes perfect sense for oil and gasoline prices to jump in advance of summer. More people on the roads means greater gasoline consumption, which in turn results in higher prices.
And higher gas prices are already happening — but not because demand is rising or because there’s a shortage of either oil or gasoline. Prices are rising because energy speculators around the world are anticipating that they will jump.
That’s going to be the wrong call for the second straight year.
According to the US Energy Information Administration, the price of a gallon of gasoline now averages $2.44. That’s around 12 cents a gallon higher than it was just a month ago.
But there’s a problem with this normal course of events.
For one thing, there is too much oil and gasoline in the US and around the world. And there’s no sign that any of the major producers, in the Middle East, Russia or US, are about to cut back on the pace at which they are pulling oil from the ground.