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Global Trade

“The economics of gas prices are comprehensible. It’s the politics that don’t make sense.” That’s a quote from a recent Washington Post editorial about the rise and recent fall of gas prices, aptly titled “End the gas-price blame game.” The editorial, published before last week’s announcement of the release from the Strategic Petroleum Reserve, summarizes an all-too-familiar scenario in the U.S. political game: When gas prices rise, politicians look to place the blame in a variety of places – oil companies, opposing political parties, Wall Street traders, Federal Reserve policies, and others.

Big numbers make headlines – like our announcement of $10.7 billion in earnings for the first quarter of 2011. What may not make the headlines is the context surrounding that number, so I thought I would share with you what I told reporters following the announcement.


Here’s a simple fact of economics that’s getting everyone in Washington pretty excited this week: When prices increase for a commodity like oil, companies that produce and sell that commodity earn more money. So, as we get ready to release our quarterly earnings on Thursday, here are a few things to consider when you see the inevitable headlines and sound bites about high gasoline prices and what to do about them.



  • Worth a deeper look...