The price of oil and gas went down a bit today after the EIA weekly report showed slight gains in petroleum stockpiles (almost 5 million barrels or .6%) due to decreased demand. Storage levels of most fuels remain low compared to last year (46 million barrels or 6.5% below) and the five-year average, leaving upside risk for prices if there is a drawdown in the months ahead. I’m proud that our country has lowered consumption this year — and hope we continue to make further progress through a shift toward more efficient vehicles and other travel options/telecommuting.
The huge cost increases from a quadrupling of oil’s price in the past four years that are finally changing the behavior of drivers is now forcing producers of petrochemicals to change as well. For instance, Dow Chemical Company is finally sharing its increased costs with consumers. Similar to the airline industry, Dow adjusted their prices 20% last month in a press statement. The announcement included harsh words for President Bush and other federal leaders whose negligent policies over the past many years have allowed such a dramatic shift to occur without the anticipation of even our Energy Information Agency who repeatedly expected prices to fall back to previous norms below $60 per barrel. Yesterday, Dow announced another 25% increase in prices throughout North America.
This inflationary pressure of rising energy prices is a key driver in the Fed decision today to keep interest rates unchanged, making US economic recovery a difficult task ahead. An important part of the effort to lower inflation as energy prices climb is for us to increase the energy efficiency of everything we do, accelerating the reduction of the energy intensity of our economy. SET aims to help people in government, business and throughout society to make this shift to efficiency — raising the utilization of wind, solar, geothermal and other renewable energy sources. Let’s make it happen!