As expected, when the economy took a hit like yesterday when job growth was anemic and unemployment went up slightly, oil prices went down. It has nothing to do with supply and demand.
In one of my previous entries regarding oil speculation, I wrote: “I’ve noticed that there’s a relatively close correlation between the price of gas and the economy. When there are good economic reports, gas prices will go up a week or so later. It’s no accident we’re seeing higher gas prices recently because the economy has improved recently. Speculators are probably betting that people will drive more when they earn more or have a job.”
So it’s no surprise today that oil prices are dropping. The European debt crisis has ensnared Spain after Greece. Italy might be imminent. China and India’s economies have slowed. I’ve already mentioned what’s happening with the United States.
When the economy was improving, Mitt Romney attacked Barack Obama on high gas prices in April. Now that gas prices have alleviated, Romney attacks Obama on the slow job growth and slight uptick in unemployment.
Since gas prices was such a huge issue just a couple months ago, maybe Obama should start touting how gas prices have gotten lower.
The ideal would be end oil speculation, so we don’t have deal with this dilemma all the time, so we can have an improving economy and low, affordable gas.
