Why Oil Prices Are Falling  

TomDispatch has a post from Michael Klare which echoes the seemingly widespread view that falling oil prices are in a temporary phenomena caused by the forthcoming US elections.

The price of crude oil, which this summer threatened to top $80 a barrel, briefly dipped under $60 for the first time in six months yesterday, a 23% decline from July highs. In the Midwest, where gas not long ago had soared to $3 at the pump, it now averages, according to the Energy Department, a nationwide low of $2.20 a gallon ($1.89 at one Jackson, Missouri gas station).

At the same time, another set of figures rose precipitously. According to a recent Gallup Poll, 42% of Americans "agreed with the statement that the Bush administration ‘deliberately manipulated the price of gasoline so that it would decrease before this fall's elections.'" Two-thirds of those respondents were registered Democrats for whose party the price at the pump has proved a potent issue.

Such a conspiratorial train of thought is not exactly lacking in logic. After all, the President and Vice President arrived in office deeply tied to the energy business (which has been a major supporter of the Republican Party) and promptly Halliburtonized the military, then Iraq, and later New Orleans; the administration's first National Security Advisor (now Secretary of State) Condoleezza Rice had already had a double-hulled oil tanker named in her honor by Chevron. The first American ambassador to Afghanistan after the fall of the Taliban, and the present ambassador (think: viceroy) of Baghdad, Zalmay Khalilzad, had been an advisor to Unocal, the energy company that negotiated unsuccessfully to put a natural-gas pipeline through the Taliban's Afghanistan.

In addition, Dick Cheney, charged with setting the administration's national energy policy, notoriously did so (while denying the fact) in secret meetings with Big Oil execs back in 2001. Officials from Exxon Mobil, Conoco, Shell, and BP America met with Cheney's aides, while at least the chief executive of BP met with Cheney himself. Chevron was one of a number of energy companies that, according to the Government Accountability Office, "gave detailed energy policy recommendations" to the Vice President's task force -- while, of course, environmentalists of every stripe were left out in the cold.

The oil companies have no less notoriously made an absolute boodle in over-the-top profits (and oil executives in over-the-top compensation packages) on this administration's watch; so it's certainly imaginable that Washington officials might have jaw-boned a few months of cheap energy from them in return for a couple of more years of mega-profits. But on this there is, as yet, no evidence. When it comes to other reasons for the fall in the price at the pump quite a lot is known -- especially by Tomdispatch resident expert and author of the indispensable Blood and Oil: The Dangers and Consequences of America's Growing Dependency on Imported Petroleum, Michael Klare. He answers the questions in all of our heads below.