This should do wonders for an economy that has already technically slipped back into a recession (i.e., decline in GDP). (See here, here, and here for news stories). The Washington Post article notes:
One factor is lower crude oil output from the Organization of the Petroleum Exporting Countries. Saudi Arabia is producing about 700,000 fewer barrels a day than a year ago, according to the International Energy Agency.It should be noted that much of the blame should be laid at the feet of the Federal government, from special regional and seasonal blends, to ethanol requirements, to forcing refineries to close, to reducing oil production on federal lands and in the Gulf of Mexico, to failing to approve construction of the Keystone pipeline.
Yet global inventories of oil are ample, and the IEA has forecast that increases in oil supplies around the world — including the United States, Kazakhstan, southern Iraq and Africa — will outstrip increases in oil demand.
“Oil prices are inflated by concern about potential oil supply disruption. All I have to do is watch TV for five minutes,” said Fadel Gheit, an oil analyst with Oppenheimer. He pointed to continuing tension between the United States, Israel and Iran over Tehran’s nuclear program; the ongoing civil war in Syria; and factional violence in such oil-exporting nations as Libya and Iraq.
But some analysts also pointed to refinery issues. Several refineries have been shut down for routine maintenance, and in the eastern United States, several refineries simply went out of business in the past year. “Atlantic Basin capacity closures have improved refining fundamentals,” the nation’s biggest refiner, Valero, said in a slide presentation at a Credit Suisse conference this month. It estimated that nearly 1 million barrels a day of refinery capacity has been closed on the East Coast or in the U.S. Virgin Islands in the past two years, ....
As the CNS article reports:
Gas prices have been at sustained highs throughout much of President Obama's time in office. Although there are many factors to gas prices, Heritage Foundation noted in August 2012, that "after three years of adding regulatory hurdles and blocking exploratory access and development, President Obama's policies are helping keep prices higher than necessary."