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OIL PRICES attornies general and those in the Congress and Senate. A Federal Trade Commission investiga- tion looked into the prices relative to gouging concerns,and as was usual with such inves- tigations there was no finding ofwrongdoing. In 2002, the report stated that the spike: “…appears to have been caused by a mixture of structural and operating decisions made previously (high capacity utilization, low inventory levels, the choice of ethanol as an oxygenate),unexpected occurrences (pipeline breaks, production difficulties), errors by refiners in forecasting industry supply (mis- estimating supply, slow reactions), and decisions by some firms to maximize their profits (curtailing production,keeping avail- able supply off the market).” At that point in time few realized how dramatically the factors driving crude oil prices and the resultant gasoline prices would shift. It has been a long time since issues like the relative rates of refinery uti- lization, or the “Balkanized gasoline supply,”or some regional disruption rela- tive to a problem with a pipeline or refinery made notable headlines in the national media. These factors are still relevant as contrib- utors to volatility and regional price swings, but since about 2005 they have been com- pletely overwhelmed by the dramatic increases in the price of crude oil. All motorists and undoubtedly most marketers and dealers would gladly exchange an aver- age price at the pump of $1.50 with the occasional spike to $2 per gallon for the mas- sive volatility and peak prices we see today. This two-part article will take a look at Our new version has been released, contain- ing many new features which have been added without changing the Easy-To-Use format. what has changed since 2000 and discuss in specific detail the opposing arguments that today’s prices either reflect natural market forces or are driven by speculation largely linked to large investment banks, index funds,“dark”swaps markets and a bunch of money in search of an outlet.Part one will focus on the functional changes that have taken place through globalization driven demand and a view of decreasing world sup- ply that is driving the supply and demand argument.Part two will look at financial reg- ulatory changes and the argument that out-of-control speculation is driving exces- sive prices along with the legislative remedies that are now in the rulemaking process. Complete Degree Day Forecasting System | Accounts Receivable with Daily Aging | Burner Service Billing, History, Inventory | Customer Control & Credit Analysis | Budgets, Collection Letters | Extensive Sales Tax Reporting | Vehicle Maintenance | Tank & Truck Liquid Inventory Control | Lowest Credit Card Selection Module | Increase Gallons/Stop, Minimize Runouts | And Many More Features.... Market Line Computers | 317 Harrington Ave. | Closter, NJ 07624 •Call Today For Complete Product Literature! 800-210-1498 Come see us at AREEbooth #617 SUPPLY AND DEMAND—CHINA AND THE DEVELOPING WORLD In the latest (Jan. 11, 2011) United States Energy Information Authority Short-Term Energy Outlook the administration expects the price ofWest Texas Intermediate crude oil to average about $93 per barrel in 2011. And for 2012 EIA expects WTI prices to con- tinue to rise,with a forecast average price of $99 per barrel in the fourth quarter 2012. For gas prices,EIA expects regular-grade motor gasoline retail prices to average $3.17 per gal- lon this year and $3.29 per gallon in 2012. “We forecasted growth in world oil con- sumption this year of 1.4 million bbl/day 22 APRIL 2011 | FUEL OIL NEWS | www.fueloilnews.com