Crude oil prices are flirting right now with $43 a barrel—an all-time high. This may come as a bit of a surprise, since Northwest gas prices have fallen substantially over the past 2 months: in late May, gas in Washington and Oregon averaged about $2.30 per gallon, but it’s below $1.96 today.
The rise in Northwest gasoline prices through late May corresponded with a runup in global crude oil prices. But oil prices fell by 15 percent from late May through mid-June, as OPEC signaled it would increase its output. At the same time West Coast refiners built up their stocks of gasoline, leading to a fall in gas prices even in the middle of summer driving season.
Then the bad news started again—most recently, the news that the Russian government may shut down production from oil giant Yukos.
So with oil prices on the rise once more, we’re likely to see yet another increase in prices at the pump over the next few months. And that could provide yet another piece of evidence that a transportation system dominated by the automobile shackles our economy to distant oil wells (the Northwest produces a tiny amount of petroleum in comparison with its consumption) and to global economic forces far beyond our control. Political shenanigans in Russia (or Nigeria, or Venezuela, or anywhere in the oil producing world) now work to siphon money out of our economy. All the more reason to take steps now to wean ourselves from the sticky stuff.
