The price of gas is determined by supply and demand

[mudesi]

I know this may not be a popular thing to say, but it's the truth.

In the short term I have no doubt that oil prices are manipulated by the oil companies and the speculators for maximum profit. But in the long term, the increasing price of oil and gas is due to supply and demand.

There simply isn't any more light sweet crude being pumped and discovered to keep up with demand. In addition to that, the technology used to refine oil is specifically designed for light sweet crude, while more and more oil being pumped today is sour crude, which contains more sulfur and is harder to refine - and costs more as well.

Then factor in that demand for oil is increasing and will continue to increase as developing nations such as China and India continue to industrialize, and as the population continues to explode, and as more ignorant people buy gas guzzling SUVs and waste energy on a regular basis.

A decrease in supply raises the price, an increase in demand raises the price. It's a double whammy and it's not going to stop.

[mmonk]

1. Oil prices are not at a "pure" level based solely on demand.

There is some elasticity and some lag. Currently demand is down 2% and supplies have increased. However, a five times increase in such a short period is extreme and if there were shortages due to increased demand, we would have lines. While the overall trend is for increased demand and stresses, the price lately has been influenced by more than demand including but not limited to saber rattling in the Persian Gulf.

[katandmoon]

2. Whenever I hear the phrase supply and demand I think of an old Robert Klein routine

Where he explains the the law of supply and demand as "We have all the supply, so we demand whatever the fuck we want!"

[mmonk]

3. LOL

[baldguy]

4. Supply and demand - but not of oil

Supply and demand of oil CONTRACTS. The oil barons are now selling gas made from oil purchased at $30/barrel - and they have billions of dollars-worth of those contacts. They have absolutely no reason AT ALL to increase production or look for ways to decrease the price.

[mmonk]

5. Until demand lessens which is happening now.

They hate increasing inventories.

[jinswaz]

10. Gas Prices

Gas demand in the US is going to continually decline.

[jinswaz]

12. Gas Demand

I have also noticed how people are driving their vehicles slower now.

[mmonk]

13. I wish highway speed limits would be lowered.

Of course the answer in the long run is alternative fuel sources and innovation.

[baldguy]

15. Nope, not even close.

Our demand for gasoline, or lack of it, has absolutely no effect on the supply of oil on the world market. There will always be a demand, either here or in China or in India. As a fuel, as chemical additives, as plastics. As such the end consumer has little or no effect on supply. Oil companies can produce more oil - thus make less profit, or produce less oil - and thus make more profit.

They choose to make more profit.

[kimmerspixelated]

6. Touche'!!

[Bonhomme Richard]

7. Of course, if you can manipulate the supply. n/t

[loveable liberal]

8. exactly. expecially in a market with no competition.

[jinswaz]

9. Gas Prices

Unfortunately, gas prices will see $6.00 a gallon by next year.

[jinswaz]

11. Gas Prices

I predict we will all see $5.00 a gallon gas prices by the end of this year in all states.

[JANdad]

14. ...

As Iceman would say...BULLSHIT!

[louis c]

16. ITDS

It's The Dollar Stupid