How to lower oil prices right now – Yes. We. Can.

Barack Obama does not have any answers. All that he and his Democrat followers can do is blame the increase in gas prices on Big Oil, the war in Iraq, and Republicans that refuse to “invest” in new technology so we can “get off” our addiction to oil.

Of course, it doesn’t help that Dick Cheney used to be the CEO of Halliburton and George W. Bush has all of those buddies that are in the oil industry; but why mix fiction with fiction.

So what can be done today so we start seeing a reduction in fuel prices tomorrow?

Pat Casey wrote a nice piece at American Thinker that defines what can be done to reduce oil prices right now. Unlike Democrats, Casey understands the basics of how commodity markets work. These liberals can’t even understand the basics, which makes them unqualified for public office as far as I’m concerned.

Ultimately, markets are driven by supply and demand. But economists and scientists have known for years (centuries, even) that severe market swings, both upwards and downwards, have a life somewhat independent of supply and demand. At their core, human beings, their emotions, and their subconscious behavior patterns primarily drive those severe swings. Call it “panic”, refer to it as “jumping on the bandwagon” — it exists, it is a component of today’s oil prices, and it can be addressed.

Casey quotes quite a bit from Martin Feldstein’s op-ed in The Wall Street Journal on July 1 entitled We Can Lower Prices Now. Do spend sevent minutes to absorb both articles.

Casey finishes up…

Obviously, working on more efficient cars for the future does nothing for the oil and gasoline currently used by the 247,421,120 cars estimated to be in use today within the United States. The increased price of gasoline will probably cause many people, especially the poor, to drive a little bit less. But most people don’t have the means to go out and immediately buy a more efficient automobile (again, especially the poor), so it’s safe to assume that our demand for gasoline over the next few years, if not decades, is not going to recede much, if at all.

That means that the only option we have to negatively affect the price of gasoline immediately is to open up more of our own oil fields for exploration and drilling. I’m not referring to the Democrats plan’ to force oil companies to drill dry holes in presently leased lands that revert back to the government in a few years, but allowing those companies to drill in new areas where there is oil – offshore, in the Midwest, and in ANWR.

So, the commodities market is not just based on the laws of supply and demand, there is a human component to the equation – speculation.

Speculation works both ways, you can look to the future and see the bottom falling out – or prices going to through the roof – for a particular commodity even if supply and demand is in perfect balance that day.

Since Democrats may be in charge of the Executive and Legislative branches of the federal government, you may assume that liberals will continue to sit on their hands and do nothing; guarantying that America will not move closer to energy independence.

But what if tomorrow, the leaders announced plans to allow private companies to drill offshore, drill in ANWAR, build 25 oil refineries and 30 nuclear power plants to provide energy for America? What would happen to the human component variable in the commodities market?

I’d sell my oil future contracts pretty damn quick.

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Steve McGough

Steve's a part-time conservative blogger. Steve grew up in Connecticut and has lived in Washington, D.C. and the Bahamas. He resides in Connecticut, where he’s comfortable six months of the year.

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