In a first since they began trading on NYMEX in 1983, futures for oil hit $92. This continues an eye-popping runup in prices this year, as you can see in the graph below from another blog, The Big Picture. Will we hit $100? It seems inconceivable, but these prices are several times what they were just a few years ago. That mark isn't far off.
This trend is driven, once again, by concerns about security of supply due to events unfolding in oil-rich nations. Specifically, kidnapping of workers in the troubled nations of Sudan and Nigeria, coupled with the Bush Administration's levying of sanctions on Iran. Personally, I'm sick of relying on regimes that are either corrupt, have little regard for human rights, or both. Surveys confirm that most Americans are with me on that. To paraphrase James Carville, "It's about security, stupid."
Of course, prices are a dance with two partners so relentless demand growth especially in populous China and India plays a role as well.
But the bottom line is that none of this should be surprising. Instability in oil-rich nations and booming demand aren't news.
What should be news, and alarming news at that since there are alternatives, is that we remain on an oil price rollercoaster powered by events beyond our control.
The only solution is to get off this ride. And the way to do that is to reduce our dependence on oil, dramatically and quickly. Which is why Congress should act to pass an energy bill that tackles our addiction, and the President should sign it. ASAP.