Why gas prices??

Question

Ok I know the prices of gas is rising a lot everyday.

I am 12.

I need someone to tell me exactly why the gas prices are rising.

I just want a better idea of this problem. Cause i really dont know.

Answer 1

Oil is a free market commodity that is priced by availability and demand.  Today it's heavily influenced by speculators that buy quantities of oil expecting a big return as the price rises.  Massive buying such as this indicates a shortage to the market and forces more price increases.  There is also the manipulation by Big Oil which is hard to prove and the control by OPEC.

Demand has been increased dramatically by new big demands by the great change in the economies of both China and India.  American demand, of course, is on the rise overall, too.

The US oil companies are sitting on huge tracts of land of which they own the oil rights but are not drilling.  There is no need to suddenly open up new areas for Big Oil to drill in America because there are places to drill now.  These areas may cost more but, like the oil sands development in Canada the price of oil is strong enough to create huge profits from most claimed ares in America.

American increase in drilling and refinery capacity will do little to offset any oil price increases because the amount would represent only a small percentage of total oil capacity in the world, besides which Big Oil has no interest in bringing the price down and decrease their huge profits.

Bush, essentially being an oil man has no interest in lessening his and his friend's profits either.

Answer 2

I seriously would reccommend you consult an adult you know in real life on an issue like this. Online, some people say this and other people say that. I won't spread my POV now.

Answer 3

It's a complex issue. It's also open for debate because there is one camp who believes it's simple supply and demand at work. Others feel it's speculation.

The truth is that there are many factors driving up the price of oil right now. Most recently, events unfolding in Iran and tensions between Israel and Iran and the United States comments that we will defend our allies (Israel is our ally) if Iran strikes, has sent oil prices higher.

Low refinery capacity, downtime for routine maintenance, a shift in some areas of the country to a specific "summer blend" of gasoline, and the expectation for higher demand due to summer driving are all factors. So is the war in Iraq.

Ultimately I think we're also in an energy bubble. and like in all bubbles, things get ugly crazy before the bottom drops out and things return to reality. Everyone in the futures markets are scrambling to get their piece of the prize. There's gobs of money to be made here at the moment.

Oil will come down. In fact, I think it will tumble. But for right now it's what it is.

http://www.springboardblog.blogspot.com

Answer 4

Like the price of milk, which doubled since Bush took over, the price of gas has tripled. Our President is a magic doubler and tripler, he doubled the national deficit, he tripled the amount of wars the USA is in (Kosovo, Iraq, Afghanistan).  He can't help himself.

Now people want to vote for McSame, because they can't get enough of the magic.

Answer 5

Of course, you know that gasoline is a derivative of oil.  The main reason why oil is as high as it is is because the USD, on which oil is traded, has been tanking. If it were falling at a moderate rate, then the trade-off would more than likely be 1:1. However, at the rate it has been falling, traders and investors have aggressively moved their money into commodities, which tend to offer stability during ecomomic slowdowns and falling currencies. Historically, the preferred commodity for such financial safety has been gold. But, now oil is the new gold. That aggressive rush to financial safety has caused oil to trade even higher. Thus it's more like 1.5:1.

While the US Congress is battling this oil speculation, they are fighting the byproduct of the problem, not the problem itself. The underlying catalyst is the falling USD. If the USD were to rise back towards its previous dominance among world currencies, oil would fall as fast as it has risen.

In order to strengthen the USD, the dillution of USD in the market must be curtailed. But, the US government is the number 1 culprit for dilluting the USD -- deficit spending. Reduce the deficit to zero, establish a surplus, and oil will fall like a rock. But, the GOP, especially Neocons will never let that happen. There are reasons why, but that's for another time and place.

Answer 6

Gas prices are going up lately because of the weak dollar and unrest in the  middle east it really doest have to do much with the supply of oil because the output it sufficient for the demand