Monday, April 28, 2008

$4 Gas

I was at a dinner last week for work, and Tony Blair the former Prime Minister was the featured speaker. Tony Blair made an interesting case for why the West may need to go in to Iran and take out that problem before it starts. But what was interesting is that no mention was made about "never having found the WMDs." It was a curious oversight.

Nevertheless, oil hit $120 today (the chart below shows Friday's closing price for oil futures on the NYMEX), and that's with the current demand and the current instability in the Mideast region. Everyone seems very quick to notice the rising price of gas at the pump, but most folks believe that the demand for oil will not diminish anytime soon. There are plenty of fancy theories like "Peak Oil", etc. but it's really as simple as this graphic again: while we used to be the worlds largest consumer, the rest of the world is going through the equivalent of our Industrial Revolution, and demand for oil along with other commodities is not just about the developed Western world.

If you've traveled to Europe, or anywhere but the US, you might notice the lack of large, gas guzzling cars. Yesterday I saw a Hummer headed down the road, and I was so glad this guy had it because who knows when you're going have to traverse a hill pitched 45 degrees on the way to picking up your kids from piano lessons.

Tom Toles is one of my favorite political cartoonists at the Washington Post. His cartoon is priceless. We cry about those gas prices, but to some extent, it's self-generated.