I was reading an article in Fortune magazine entitled, "Why Gas Prices Dropped," by Nelson Schwartz. The first thing that caught my eye was the fact that 42% of Americans believe that lower gas prices are part of some Republican plot to keep Republicans in control of Congress. This thought didn't even cross my mind. Fortune's take on the situation is that the traders have a whole lot more to do with it. It seems bizarre that a bunch of sweaty people in different colored jackets can play such a huge role in energy availabilty and price determination. Is that how we want our future to be controlled in terms of energy? At any rate, the article explains that investors and hedge funds banked on this year being a repeat in terms of severe weather and the high fossil fuel prices that followed Katrina. Yet, when meterologists said in August that this repeat was not likely, the oil prices dropped. This decline was also sparked by the end of the summer travel season and the reduced weighting of gasoline in the Goldman Sachs commodity index. Traders cut long positions with their dumping of oil barrels like wildfire. According to the article, many traders waited too long to do this. The article cautions that oil prices could rise if there is really cold weather before Thanksgiving.

It seems bizarre to me that in this day and age with world oil suppliers being largely unstable countries, this constant threat to our oil access doesn't influence trading such that prices stay on the higher end more often than not. Once again, we are allowed to use oil as much as we want and take advantage of these plummeting prices, all along while the world seems to become more dangerous and often, antagonistic towards the U.S. As I expressed before, I think oil prices should remain higher and that extra revenue--obtained perhaps in the form of a tax--should be used by the federal government for research of alternative energy sources. I understand that the market drives energy to a great extent, but fearing a repeat Katrina and not as much, foreign threats to oil supplies, seems misplaced and irresponsible. Maybe I am just not comprehending how the future trading actually works for fossil fuels, but then again, at least I didn't fall into the 42% who suspected a Republican plot.