Thursday, April 28, 2005

Meanwhile, back on the ranch...

Here on our timber ranch in Southwest Oregon, most events taking place in the world have little effect on us. But some simple events do create an impact--like the price of gas rising because of the law of supply and demand. Globally, crude oil is in demand in China and India as it never has been before, as their growing economies continue demanding more and more oil and gas to fuel their industrial expansion. And our economy continues to grow here in the US.

When I pay $2.58 a gallon locally for gas, it is because there is noplace else where I can get it for less. Supply and demand. Simple, effective, and all you really need to know about this current gas price run-up. If this price hike were artificially being maintained (say by an OPEC embargo as in years past), then the dynamics of supply and demand would eventually bring the price back down as soon as someone saw a way to make money off of it. It's pretty clear to me we aren't dealing with a monopoly or a cartel here -- just supply and demand.

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