Economy students: explain this week's oil price news?

Question

The price per barrel has dropped.

Inventories have risen.

The price at the pump continues to rise and shows no sign of stopping.

Justify this in terms of:

a) supply and demand

b) speculation

c) insider influence

d) the general honesty of mega corporations

Feel free to express an opinion or, if you can, take it from a textbook formula.

Answer 1

You have to look at the refiners who take the Oil at U.S. ports and deliver it to the refinery. American refineries are in poor condition on average, though maybe not quite as bad as Nigeria's or Iraq's. America cannot build refineries because EPA requirements are too strict. The EPA controls cut into profit margins. Meanwhile, people are sick of high cancer, retardation, and autism rates among their young and new borns because of pollution in the water/sea/air/ground.

So we pay others to refine gas, or the gas is slow in being refined. There's really plenty of Oil, just no way to quickly convert it to gasoline without destroying or crippling life as we know it in America.

Answer 2

has come down to $129 per barrel

Answer 3

Ok, in my opinion, supply has increased but demand has actually dropped some because people dont want to pay the increased prices, so actually the price at the pump will no drop due to this.  There is also still the risk of oil threats in the middle east that is a concern to oil companies.

I also believe that the green movement is causing the gas prices to go up as well because the big oil companies want to make as much money as they can before the EV cars start hitting the market and other technologies, gas will soon be a thing of the past.

Edit:  I take it your going to tell us the answer or at least what you think?  Yeah there is defiently greed involved but I think high gas prices are great.  We will finally start researching other methods than gas for energy, make improvements to the battery, like we should have in the 60s.  There hasn't been improvements to the battery in years until now, they are finally researching it again.  So, climb gas climb, it will only lead to a cleaner, more free America.

Answer 4

b. speculation  

It could be c. insider influence and d. the general honesty of mega corporations.

Greed is the culprit. It shows how unbalanced our economy is. Greedy investors, corporations, etc. are putting a lot of resources into oil because of the return on equity. It is pushing gas prices up. It will burst but who knows when and then what will happen. The damage is being done now.

It is long overdue that the government step in. Gas and oil are basically utilities. People need them. It's not a luxury. The speculators (greed infested people) need to be stopped. It is not good for the overall economy.

edit: Healthca has made some excellent points. But I don't care about the oil and gas companies. It's their fault for sitting so long.  Greed is what is destroying this nation and the world. Long-term outlook is not looking good. Short-term is horrible.