We went through this in 08, and now it's happening again...
People - often Conservatives (who should be familliar enough with our monetary system to know better) - claim that inflation - supposedly driven by 'money printing', government spending, or government debt - is the 'real reason' for the rising price of gas
Every time, they're WRONG.
Here's why 'Inflation' (which, BTW, is NOT caused by deficit spending) has NOTHING to do with the price of gas going up.
If it WERE inflation, we'd be seeing (1) a gas spike ONLY in economies tied to the US Dollar as a primary currency or currency-peg (since some countries have, in fact, made the fatal mistake of adopting a 'standard' for their money, thinking it will be somehow 'better' if they commit economic suicide with dollars instead of with gold), (2) there would actually BE inflation (an increase in the money supply) in the US, (3) there would be a general trend of rising prices in-sync with (not being lead by) gas.
1) While oil is 'priced in dollars', dollars are also priced in dollars.
This means that IF it was the value of the USD causing the price of oil to rise, then the increase would ONLY happen in dollar-denominated economies (IIRC, there are still a few others that are pegged to a 'dollar standard').
Why? Because if a 'low dollar' was causing the rising price of oil, then it would be cheaper to buy dollars with foreign currencies NOT impacted by US inflation....
So oil (and everything else, at the same time - not lead by oil) would be more expensive in the USA - but not overseas. We aren't seeing that - it's NOT inflation.
2) There is almost NO inflation in the US economy right now.
Yes, you heard me right... Almost no inflation.
Why is this? Economically, Inflation is a specific condition that leads to higher prices. Higher prices, in and of themselves, do not per-se mean inflation - especially if those higher prices are confined to limited sectors of the economy.
What is the condition in question? An increase in the money supply, without a corresponding increase in demand.
And that is something we have NOT seen, in any substantial amount, since Pres GW Bush was President (back when the economy, you know, was actually working).
You see, the US money supply is created primarily by the rate at which new loans are made, as opposed to the rate that old ones are being paid back or defaulted upon. This allows us to have less than $1 TRILLION in physical paper and coin money (yes, that's about all there is) but have that 1TN work in the economy as if there was 13x more of it.
It's a good system - in fact it's the ONLY one that actually works (in that it generally prevents deflation - and deflation is the ultimate form of economic doom), which is why the whole world uses it in one form or another.
A side-effect of this, is that our money supply is joined at the hip to the health of the broader economy.
If loans are being made faster than they are repaid/writen-off, our money supply grows
However, if more loans are being repaid or written off (due to default/bankruptcy/etc) than are being made - the money supply contracts (which is very, very bad - see above about DEFLATION).
So, when you have an economic situation where (A) banks are reluctant to lend money due to fear of default risk, (B) there is a massive and inordinate number of defaults on major long-term debt, and (C) constant negative economic news causes people to focus on repayment of debt over continued consumption...
You are looking at a SMALLER money supply - not a LARGER one.
Now, the Federal Reserve can take action to try and prevent the money supply from shrinking any significant amount (remember, that's an unrecoverable 'economic death' scenario) - but essentially all of that action only actually impacts the money supply if it results in more lending.
TAKE NOTE: The FED does *NOT* 'create money' to inable federal spending. They create money to enable *everyone's* borrowing and spending - so any measures to prevent them from creating more money will inevitably hit *UOU & ME - and AMERICAN BUSINESS* before they trim a dime from the federal budget. Deflationary monetary policy is just as much economic slavery as that produced by socialism. Equality thru Equal Poverty.
So if the banks sit on the money, because of fear of default-risk, or fear of onerous over-regulation... Then we end up STAGNATING... Which is where we are now. No deflation/economic doomsday - but also no inflation and thus no economic growth (low-rate inflation is required for sustainable growth).
3) The increase in the price of oil is out of sync with the rest of the economy.
This shows we aren't facing inflation, because if we were, then the price of everything would rise more or less at the same rate and the same time.
Remember: Inflation is the increase in money supply without a corresponding increase in demand, resulting in *universal* and roughly *equal* price increases due to a falling currency value.
Price increases caused by (eg, following after) rising raw-material costs, rising labor costs, or excessive regulation are NOT inflation. They're just price-increases....
When you have gold rising at an insane & unsustainable rate, oil rising at a different rate, and no corresponding-rate increase in other products... You have non-inflation price increases.
SO IF IT'S NOT INFLATION, WHAT IS IT?
The simple answer to this is, POLITICS.
Now, all this news about 'speculators' does present one bit of truth - The futures market DOES set the price of oil & gasoline (and many other things)...
However, the supposedly 'evil' futures traders (er, speculators) are just middlemen, REACTING to events outside their control.
'Speculators' are essentially betting on the future price of commodities, by forming contracts to deliver a set amount of 'something' for a set price, at a set future date. Hence the term 'Futures'.
They don't do this by getting together in a smoke-filled room & conspiring to 'fix' the price of stuff (As some would have us believe). Instead, they do it by studying current & probable future events to see what likely conditions will be, and make their contracts (bets, effectively) based on those conditions.
If they think that supply will be plentiful, trading routes safe, and political policies will be friendly to the production of the commodity in question, prices will reflect this by remaining stable, or (if they think there will be too much supply) dropping.
However, if they think that politicians (*cough*OBAMA*cough*) will enact regulations hostile to the production of the commodity - such as new regulations, windfall profit taxes, restrictions on transportation, etc... Or if they see instability in world affairs related to regions where the commodity is produced (caused by inept political leadership that's incapable of maintaining a properly forceful foreign policy)... Then prices will SPIKE.
This is why present announcements related to drilling DO MATTER even if no oil will be produced for years... The market - by way of the traders Obama loves to villify - sees the future increase in supply, and factors it into the price.
This is why a stable, forceful foreign policy matters - the market sees instability (such as the Iran situation, the Syria situation, worsened conditions in Iraq, and so on) and calculates the amount of supply disruption it could cause into the price...
But they also see inflation, you say - Yes, if there was a significant threat of inflation, the market would factor it in - HOWEVER this would not happen on a global scale unless by coincidence ALL currencies were seeing a similar inflation-risk. The Arabs taking USD for oil doesn't spread the impact of US inflation world-wide, because a weaker dollar can be bought in greater quantities by stronger foreign currencies - which would appear as a break between the oil price in other countries and that in the US.