Oil & Gas Prices
CBS News's Jim Axelrod has blogged about his now-ended Price Patrol cross-country assignment which concluded this week. The feature highlighted the cost of gasoline across the country from New York to San Francisco. Axelrod and his producers hopped a red-eye from San Francisco to cover alleged price gouging in Atlanta, which has seen high gas prices following Hurricane Katrina due to a pipeline which has gone offline.
Following a summer of relentless gas price coverage, the storm’s threat to refineries in the Gulf of Mexico added urgency to reports about the oil industry. But only one network news story in three months of summer coverage has attempted to explain the role of U.S. oil refining in the nation’s gasoline supply. Instead, networks have made passing references to the causes behind pricing and have criticized the free market.
Jim Axelrod of CBS “Evening News” provided the perfect metaphor for media coverage of gas prices last night. Axelrod just started traveling from New York to San Francisco as part of a new “Cross-Country Price Patrol,” On the first leg of his journey, he showed that he didn’t know where he was going with the story. Talking while he was driving, Axelrod said the following: “We know what kind of crazy drivers plague the streets in Manhattan. The recent spike in the price of gas has made going to the pump... I'm going the wrong way! Holy [bleep].”
Sunday’s New York Times Magazine cover story was one part ‘Mad Max’ mixed with one part poor economics. The 7,400 word piece by Peter Maass was a gusher of scaremongering end-of-world predictions and claimed that an oil “crisis” is imminent. Maass filled his story with comments and views from Matthew Simmons, author of a new book called “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.” The story did its best to paint a great scary oil conspiracy and an inevitable “crisis ahead” “whether in a year or 2 or 10.”
How do they justify this hypothesis? Because in 1980, long gas lines "cost Carter his re-election".
1. Gas wasn't the only problem with Carter.
Politicians and automakers say a car that can reduce greenhouse gases and free America from its reliance on foreign oil is years or even decades away.
In a stunning example of how the mainstream press manipulates public opinion, as well as a clear explanation as to why the majority of the American people believes that the economy is doing poorly despite mountains of statistical evidence to the contrary, the press today decided to largely ignore one of the biggest one-day declines in energy prices in many months.
As I reported here yesterday, oil prices at the NYMEX dropped by almost three dollars per barrel, with gas prices declining by almost ten cents. Yet, after scaring the American public with regular predictions of economic gloom and doom concerning inflationary fears tied to escalating energy prices the past few weeks, America's two most prominent newspapers -- the New York Times and the Washington Post -- must have decided that good news on the energy front wasn’t deserving of the public’s attention. (cont'd...)
Oil and gas prices had their biggest one-day decline in months today after an Energy Department report suggested that the highly-touted shortage that has been all over the news in the past couple of weeks is actually not the case.
The September crude oil contract declined by $2.78 to $63.30 per barrel -- a 4.2% decline -- while September gas fell by 9.86 cents to $1.885 per gallon -- a 5% decline.
According to Bloomberg:
Demand for gasoline fell 75,000 barrels to an average 9.4 barrels a day, the lowest in a month, according to the report.
``There are signs that gasoline demand is tapering off, which has reduced supply fears," said [Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York].
U.S. gasoline demand last month was lower than in July 2004 because of higher retail prices, the American Petroleum Institute said in a report released today. The total amount of gasoline supplied in the U.S., a measure of demand, was 9.28 million barrels a day in July, down 0.8 percent from a year earlier, the industry-funded group's report showed.
Isn't that fascinating? Gasoline demand was lower this July than last July. Moreover, crude oil supplies are now 9.6% higher than they were this time last year.
That's right -- I said HIGHER. (cont'd)
Unlike last week's brief but welcome departure from biased coverage on gas prices, CBS's Early Show was back to form with its biased reporting today, this time with correspondent Mark Strassmann faulting businesses for factoring higher gas prices into the price of goods and services: "And as prices keep going up, more businesses want customers, want you, to pay fuel surcharges, as if paying for your gas wasn't enough, now you're expected to pay for other people's."
Of course, it shouldn't have to take a brilliant economist to tell Strassmann that all businesses always pass on all their input costs to consumers in the final price of their goods and services, including the costs of fuel as well as wages, health care, taxes, and regulation, and that if not for a separate "surcharge," the additional fuel cost would just be factored and hidden into the "regular" price.
Read the entire transcript below:
As Mark Finkelstein accurately noted earlier this morning, NBC’s Today gave big play to the supposed havoc that rising fuel prices are having on American society. But the hype reached ridiculous levels when Katie Couric insisted during Monday’s show opening that “I had to take out a loan to fill up my minivan. It’s crazy.”
Couric makes at least $15 million a year co-hosting Today.
Here’s how Couric and co-host Matt Lauer teased their upcoming segment on the “pain” of “sky high” gas prices: