[UPDATE 11/17: Here’s a link to U.S. retail gasoline prices across the country that compares the price just before the election with gas prices one week after the election. Please note that crude oil prices are down right now. Question: How high will gas be by Christmas? Any guesses?]
I don’t usually post about national happenings, but this one hits every last one of us in the pocketbook. If you ask your neighbors whether they believe that gas prices are being manipulated for political reasons and will rise again after the election, chances are at least a few of them will say, “Yes.” I’ve personally stayed neutral on the subject up to now because of reading conflicting opinions by people who know something about the energy industry. They can’t agree on whether that is even possible. Then today I read this little blurb from an investor’s newsletter put out by New York Global Securities:
We believe that following the U.S. midterm elections on November 7, 2006, the price of oil is likely to test the tolerance of the market and the new members of Congress; that is, we believe that after the elections oil will appreciate until there is fear in the market that Congress will take action. It is too early to speculate on the exact level of the increase, but our recommendation at this time is to become progressively long oil at these prices as the election approaches, with the expectation that a topping test pattern will become clear shortly after the election. We believe that the last three major declines in the price of oil coincided with various U.S. Senatorial hearings and expectations surrounding the upcoming U.S. midterm elections. We further believe that these events may have caused speculators within the oil markets to become cautious, resulting in a drop of more than 20% in the price of oil. With regard to the two prior declines, once the Senate hearings were over and the Senate did not take any significant action, the price of oil began to increase. We expect that following the current U.S. elections the price of oil will again rise testing the tolerance of the new Congress.
Then they lay out the details over seven pages, wherein they basically say, “So much for supply and demand.” If you can’t buy more Exxon-Mobil stock this week, may I suggest filling your tank on Election Day. Me, I’ll be at North Central Cyclery getting my bike winterized.