World oil supply shrinks while big oil merges
Gas prices show no signs of moderating anytime soon, but what really spells deeper trouble for the U.S. economy are the recent record prices for crude oil, which have topped $60 a barrel.The watchdog organization Public Citizen claims the United States has allowed a few big oil companies to go on a merger mania over the past five years and gobble up market share in the gasoline refining and wholesaling business. The biggest five oil companies now control 62 percent of the retail gas market, the organization says. While consumers feel the immediate pinch at the gas pump, that's really only the tip of the iceberg. High oil prices affect everyone by driving up the cost of everything from airline travel to televisions shipped by truck. When industry pays more for energy to make products consumers also end up paying more. It's the old trickle down theory at work. At some point, if high energy prices continue for a lengthy period of time, the prospect of inflation enters the picture and the purchasing power of consumers becomes even weaker as prices for goods go up. While we as consumers of gasoline can reduce the amount of driving and buy vehicles that use less gas, we can't do that much about the bigger picture of crude oil supplies and the factors that influence worldwide supply and demand. OPEC is the supplier of the raw product and big oil is the refiner and wholesaler, but there's more. In an ever-changing global economy, China is industrializing at an incredibly fast pace and seeking a larger share of the world's crude oil supply. The fossil-fuel burning U.S. economy is in global competition for the same oil supplies, which can be pumped in their country of origin at a finite rate. China is becoming a much bigger player on the world oil market, snapping up supplies and helping to drive the prices of crude oil futures upward. That, too, will trickle down to U.S. consumers.
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