For anybody not following energy related news, you may have not noticed two stories within the last couple of months. For all of us here in Tucson the extreme rise in fuel prices that started several months ago, due to maintenance on the Texas/Louisiana gas plants was the cause of the high prices. This rise was explained as a demand issue by consumers and the use of gas from west coast refineries. Little was mentioned about the fall of crude prices at the start of this rise in gas prices. This lag can be explained by future contracts in purchase of future deliveries. But if you take this assumption along with the news stories about 1) OPEC reductions in pumping for the foreseeable future and 2) the story out this week about US energy companies drastically cutting drilling rigs, due to the cost of gas, it makes one wonder if energy companies are manipulating fuel prices.
Mike Dai
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