The International Herald Tribune is reporting on their website – From Capitol Hill to Wall Street to the campaign trail, the recent surge in oil prices is quickly threatening to supplant the mortgage crisis as the country’s leading economic issue. Last week, prices for crude set another record, finishing at $125.96 a barrel on Friday, while gasoline prices closed in on $4 a gallon.

While no one disputes that China and other emerging economies are craving more crude, the stunning rise of oil from $62 a year ago is hard to explain as only a matter of supply and demand. After all, analysts have noted adequate inventories.

Over the same period, the dollar has declined nearly 15 percent against the euro, and the jump in oil prices “is very much driven by the dollar,” says Roger Diwan, a managing director at PFC Energy, a consulting firm in Washington.

Simply put, buying oil has become a way for hedge funds, pension funds and other institutional investors to offset their exposure to dollar-based assets like United States stocks and bonds, Diwan says. And many traders have followed the market’s momentum, aggravating the trend.

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The key statement is ” Analysts have noted adequate inventories”. Brokers are driving the prices now, and supply and demand is no longer the deciding factor. Good point is made in the story about the tipping point. Maybe we just need to go ahead and reach it so we change our usage behavior and start taking control over our own energy policy.

Do every thing you can to help move us towards energy independence.

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