Rise in Oil Prices a Result of the Decline of the Dollar

The rise in oil prices is not due to the laws of supply and demand regarding oil.  It is the result of the continued fall of the dollar.  As the Federal Reserve creates more money, the value of the dollar falls.  As the value of the dollar falls and oil producers demand more and more for each barrel, the price of crude goes up.  Despite what the politicians say about the oil companies, the greatest component of the price of gas is the cost of crude.  Crude oil is about 67% of the price per gallon, 7% for refining, 11% for distribution and marketing, and 15% for taxes.  Blaming the oil companies may be good for politics, but it is not good economics. Pouring more crude into the pipeline is not going to appreciably change the price at the pump.  Nor will reducing total car travel cause much difference.  The emphasis on the supply and demand for crude does not explain the dramatic increase in the price of gas, which is far above the changes in the...(Read Full Article)