Did we have so much more oil back then? No. We have 27 million barrels more in storage right now (387 million now compared to 359.9 million then).
Are we producing less crude? Nope, the U.S. is producing more oil than we have in decades. Production was up 14% in 2012, 15% in 2013 and we're up an average of 12% this year.
Well, if we're producing so much and prices are still higher then we must be consuming more, right? Wrong again. Since we peaked our gasoline usage in 2006, we have regularly declined our usage. The U.S. is down an average of 8% in usage of gasoline. There are a variety of factors that contribute to this, including standards on increasing miles per gallon and new technologies.
So if we're producing more, using less and have more in storage, why is the price so much higher? It's simple: fear and speculation.
The fear that Russia will cut off crude supplies to Europe, ISIS rebels will cut off Iraq oil supplies and fear of the boogey man. To date, not a single barrel of oil has been disrupted by these geopolitical situations, but that's the only thing you see in the media. Will ISIS rebels march into Baghdad? Will Vladimir Putin honor his statements to work with the G8 nations and Ukraine?