Why are gas prices going down all of a sudden?

Question

About two weeks ago i was paying $3.97 a gallon, over here in San Antonio TX. and almost every day gas prices are dropping,

now its at $3.74. a gallon

im not complaining, I hope they keep going down

but I just want to know why the sudden change?

Answer 1

The powers that be have lifted the ban on offshore drilling.

Answer 2

It isn't the government.  President Bush, nor Congress, have a magic button that controls gas prices.  There is no switch to lower costs at the pump, cause hurricanes or fly planes into buildings.  

It is a free market and prices rely on supply and demand.  There is always a demand, which is why the oil companies are charging so much and posting their highest gains in history.  The supply is limited, not because we are running out, but because their are not enough oil refineries to keep up with production (source, Dr. James Cronable, Professor of geology, Metro State of Denver and contractor for OPEC).  When the prices of petrol in Denver went down last year, the local oil refinery has everyone working overtime with the amount of work they had.  

It also depends on the gas station.  If you go to places like 7/11 or Chevron, you are using OPEC oil.  OPEC is a cartel that has set limits on the amount of oil their member countries can produce and export.  

I am happy for you that the prices where you are located are indeed coming down, however, you should not feel this as the norm.  I can tell you that the price of gas as is will not go down.  If the market were to stabalize now, gas would still be above 3/per gal. average in the nation.  It is more likely to continue to rise to equal about what the Californians are paying now.  

On a personal note...this is bad for me, as I drive a sports car that runs on premium and gets about 12.5-13 mpg on my 18 gallon tank.  Rotary engines love gas.

Answer 3

Simple, the demand declined a great deal, hence lower prices.

Answer 4

Supply and demand are certainly part of it. Americans are driving fewer miles than they did a year ago.

In addition, gas prices tend to peak around Memorial Day and drop once the peak driving season goes toward conclusion. That's probably happening here.

And, there was undoubtedly some speculation by investors about oil prices, driving it artificially up. When that bubble finally burst, as it always does, the price dropped.

Answer 5

Its called the government they've finally decided to stop taking so much of our money because it is hurting the economy more than its filling their wallets

Answer 6

stagflation is kicking in.

Answer 7

Down??? where??? cause i don't see that here in my town, they're actually at the highest....you must be hallucinating.