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Yesterday, Business Insider ran this headline: “America Is Running Out Of Places To Store All The Oil It Is Pumping.” According to the article, “despite a robust export market for finished products, crude oil is backing up all the way to Cushing, Oklahoma, and is only going to get worse in 2013.” Apparently, the supply of oil is not the problem, but rather a lack of capacity in the rest of the system to get the oil to market as usable products. That is a weird way for an oil shortage to work. Also, last Friday, Seeking Alpha reported,

“Based on data released today by the Bureau of Economic Analysis for international trade through December, the U.S. shipped more fuel oils (gasoline, diesel, kerosene, and jet fuel) in 2012 than any other single export for the second year in a row (see table below). In total, the U.S. exported more than $117 billion of fuel and petroleum products, which is an increase of nearly 9% over last year’s exports. It’s also the second year in a row that the U.S. was a net exporter of those fuels and petroleum products. As the AP reported at the end of 2011, ‘The last time the U.S. was a net exporter of fuels was 1949, when Harry Truman was president.’”

I used to assume that higher oil prices meant that there was a shortage of supply. But is this true? I think it is at least worth doing some research to see what affects oil prices. How often does the mainstream media even consider this question? It is always assumed that the only available explanation is a depletion of “fossil fuels.” This story is maintained even though, in the past, it has been acknowledged that oil companies have tried to deliberately limit supply in order to keep up their profit margins. Even before WWII they were using environmentalism to get government to keep their prices up. As one geology student (who I think is too sympathetic to environmentalist claims) states,

“In 1935 Congress passed an Interstate Compact to Conserve Oil and Gas and the Connally Act. Between them, these laws assigned strict production quotas to each State. In the end, US domestic production was limited under the cloak of conserving natural resources. Once again, the ends were admirable, but it’s clear that the legislation was passed on behalf of the majors. By 1958 Texas oil wells were allowed to pump oil for only 97 days a year. The legislation was used to hold down production in order to maintain stable prices.”

Read More:  http://lastresistance.com/