Oil prices fell again today at reports of increasing supplies contradicted industry expectations. Oil hit $132.10 near the open before struggling back up to $134.44.
The Energy Information Administration reported U.S. crude oil supplies jumped by 3 million barrels last week. That’s a 6 million barrel swing from the 3 million barrel decline predicted by analysts. This significant shift is the direct result of a shift in usage, the American public’s response to $4 gasoline.
In addition to the reversal in the direction of supplies, President Bush’s public lifting of the Executive ban on offshore oil exploration accompanied by his challenge for Congress to follow suit suggested a shift in America’s policy toward increasing production in currently prohibited locations likely compounded on today’s report softening the price of oil further.
The question remains, has oil peaked or will it continue to rise over the long term? That answer seems yet to be answered and probably rests on how Congress responds to the White House’s move and to American’s ever louder voice to open ANWR and the offshore to immediate exploration and production and to how dedicated American’s are to supporting the nation’s transition from a petro-based transportation system to alternative energy vehicles.
More and more automakers are jumping on board the alternative fuel bandwagon. On Monday, Chrysler announced that it will introducing three models of all-electric vehicles beginning in the 2011 model year. With this announcement all the major automakers are throwing their hat in the alternative vehicle ring and most popular technologies are represented from both electric powered hybrids and engine/battery hybrids to hydrogen fuel cells, plug in hybrids and now, all electric cars. This building momentum, as developments are forthcoming should also help to mitigate global concerns of demand outstripping supplies.
The only certainty is that the undoing of the damage caused by 30 years of indifference and denial will not occur overnight. Still, today’s announcements of supply beginning to exceed demand could be the first tangible sign that America is wrapping its collective substantial will around the problem and getting busy.
