“Who can explain it, who can tell you why?

Fools give you reasons, wise men never try.”

Some of you may recognize the above as a linking piece, a type of mini-recitative, in the song “Some Enchanted Evening” from the musical show “South Pacific”, by Rodgers (no relation) and Hammerstein. The 1949 Broadway show was adapted into a musical film that was released in 1958 and shown in a movie house in my home town of Chesterfield some time later. Being the gullible romantic that I was, and still am, many of the songs, including this, have stuck in my memory all these years – half a century and more.

Why, you may ask, do I bring this up at this particular time? My response to you is that it seems a perfect response to the question, “What the heck is happening to the price of oil?”

In the middle of September I left these shores for a two month sojourn in my second home on the Tuscan coast. At that time I was paying something in the region of $3.25 for a US gallon of unleaded (maybe there is no other these days) regular gasoline at my neighborhood gas station. This was a price that seemed to be independent of time, at least for the past several years-and we had all got used to it. In the middle of November I arrived back in Bowling Green and at some point in the next few days my attention was drawn to the pricing feature at the same gas station and I was astonished to see that it was listing the price of one US gallon of unleaded regular gas at $2.70. My first thought was that a mistake had been made on the price board, and the price was really $3.70 for a gallon, representing a small increase. That evening at the Reverend’s bar and grill, aka gastro pub (http://reverendsbarandgrill.com/) where most days Tom Kinstle and I while away the tedium of old age, I was able to confirm that $2.70 was indeed the current price.

Today, some four weeks later, the local motorist is enjoying a price of nearer to $2.30 per gallon and it seems to be continuing on the slippery negative slope. Of course the price at the pump is related in some arcane way to the price of a barrel of crude oil and if we care to investigate, we indeed see that crude has fallen to below $60 per barrel; it seems just yesterday that we were hearing of prices that were double that figure. From the law of supply and demand we might assume that the fall in price is because of lowered demand and if this is the case then you would think that OPEC would crank back the spigot to produce less and buoy up the price. However, Saudi Arabia is refusing to do this-maybe it is playing a game of its own- and so the prices continue to fall. The losers in this game are the countries who rely heavily on oil exports to fund their economies, the alternative energy industries who find it hard to compete when oil is so cheap, and the fracking fraternity who lose for the same reason. The winners, for once, are the little people who are delighted that low prices at the pump mean we have a little more to spend on the consumer goods that we love so dearly.

I’ll drink to that!