Gasoline Prices - Supply demand and competition
Gasoline Prices - The Supply, Demand and Competition
Gasoline Prices - The Supply, Demand and Competition
Each time I fill up my car at the gas pump I often wonder why gas prices fluctuate the way they do. What factors really contribute to this growing consumer issue? The price of crude oil is by far the main determinant in gasoline prices. Other contributing factors include the speed in which retail gas prices adjust to changes in crude oil and wholesale gas prices, refinery profit margins and the possible influence of commodities speculation. The effects of OPEC (Organization of Petroleum Exporting Countries) are also examined by the Federal Trade Commission as well as possible anti-trust violations and market manipulation by refineries. OPEC, which is a cartel that tries to restrict oil output, is an intergovernmental organization of twelve developing countries which include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. It has often been said that if OPEC were run by companies instead of countries, it would be a criminal conspiracy. Crude Oil is the main component in gasoline production. In 2007, the oil cartel made bad business decisions which drove the price of a crude oil up and to a record price of $147 per barrel. In 2008 this hit our economy hard and threw us into a recession. Currently, a barrel of crude oil is around $90 per barrel and is exported to the U.S. from the Middle East and North Africa. The U.S. does have has massive oil reserves buried beneath parts of Colorado, Utah and Wyoming. The federal government, scientists and geologists have known about these reserves for nearly a century. These reserves are estimated at around 2 trillion barrels. This oil, which is called “oil shale” or “shale oil”, remains untapped because it is located at depths far below the Rocky Mountains. Scientists and petroleum companies believe that it would be extremely
Gasoline Prices - The Supply, Demand and Competition
Each time I fill up my car at the gas pump I often wonder why gas prices fluctuate the way they do. What factors really contribute to this growing consumer issue? The price of crude oil is by far the main determinant in gasoline prices. Other contributing factors include the speed in which retail gas prices adjust to changes in crude oil and wholesale gas prices, refinery profit margins and the possible influence of commodities speculation. The effects of OPEC (Organization of Petroleum Exporting Countries) are also examined by the Federal Trade Commission as well as possible anti-trust violations and market manipulation by refineries. OPEC, which is a cartel that tries to restrict oil output, is an intergovernmental organization of twelve developing countries which include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. It has often been said that if OPEC were run by companies instead of countries, it would be a criminal conspiracy. Crude Oil is the main component in gasoline production. In 2007, the oil cartel made bad business decisions which drove the price of a crude oil up and to a record price of $147 per barrel. In 2008 this hit our economy hard and threw us into a recession. Currently, a barrel of crude oil is around $90 per barrel and is exported to the U.S. from the Middle East and North Africa. The U.S. does have has massive oil reserves buried beneath parts of Colorado, Utah and Wyoming. The federal government, scientists and geologists have known about these reserves for nearly a century. These reserves are estimated at around 2 trillion barrels. This oil, which is called “oil shale” or “shale oil”, remains untapped because it is located at depths far below the Rocky Mountains. Scientists and petroleum companies believe that it would be extremely
Cited: Hal, KRXA. "http://dagblog.com/politics/real-gasoline-prices-have-fallen-over-past-60-years-622." 24 April 2009. Dag blog. 24 November 2011. Hill, Patrice. "http://www.washingtontimes.com/news/2011/jan/2/dramatic-spike-in-gas-prices-forecasted/?page=all." 2 January 2011. The Washington Times. 24 November 2011. "http://energytomorrow.org/economy/gas-prices." 2011. Energy Tomorrow. 24 November 2011. "http://moneyland.time.com/2011/10/19/price-hike-at-the-pump-gas-prices-forecast-to-decline-spike-instead/." 19 October 2011. Time - Moneyland. 24 November 2011. "http://www.ftc.gov/opa/2011/09/gasprices.shtm." 1 September 2011. Federal Commission. 24 November 2011. "http://www.measuringworth.com/uscompare/." n.d. measuringworth.com. 24 November 2011. "https://web.pricelock.com/index.php?c=learn&m=commentary&gclid=." 3 November 2011. Pricelock Monthly. 24 November 2011. Petherick, Christopher J. "http://www.americanfreepress.net/html/u_s__has_massive_oil.html." 8 May 2006. Americanfreepress.net. 24 November 2000.