You serious, Clark?

Posted on: May 3, 2018 at 12:27:01 CT

The possibility of shredding the Iran deal and imposing sanction on them is causing uncertainty in the oil market. There is no link needed for that.

Why were high gas prices high in 2007-2008? Demand was at an all time high for gas; people were driving Hummers and gas efficiency was an afterthought. Then Katrina hit and knocked out a major oil refinery in the US.

"It exposed how little surplus refining capacity we have in the U.S.," said James Crandell, an energy analyst at Lehman Brothers.

Then you have Israel invading Lebanon and Iran being sanctioned, further reducing crude availability. You also had Iran and Venezuela asking for more profits from oil sales.

And to further complicate matters, the lack of supply was not picked up by non-OPEC nations like Kazakhstan, Russia, and the US. Drilling bans (from Obama) exacerbated the situation.

Then, after all was said and done, speculators were buying oil and oil futures because the stock market was in a recession. An investor influx increased demand on an already low supply.

ALL OF THIS caused $130-$145 barrels of crude, which led to $4/gallon gas. Not that Im complaining; I think gas prices are low for such a high-demand commodity. And it will spur innovation for battery technology and alternative fuels.