Why have gas prices gone down?

Question

Where I live, gas prices have dropped at least 70 cents a gallon over the last 3 weeks or so. As far as I know, not a single drill has hit the waters off the US coastlines, so why the drop?

Answer 1

Simple economics: At $4 + a gallon people began conserving and buying less gas. That, coupled with the increasing demand to "Drill here. Drill now." caused the price of a barrel of oil to decrease. Lower demand always results in lower prices.

I urge you to read these 2 books by Thomas Sowell: "Basic Economics: A Citizen's Guide to the Economy" and "Economic Facts and Fallacies".

Answer 2

Oil is based on futures. Anybody with some money can invest in futures.  It needs upfront money to support the pricing. Also oil can be shorted (sell high then buy low).  If one believes oil prices will go up then they will buy.  If they believe oil will stay the same they won't get in and if they believe oil will go down they will sell or short.  People don't believe there is enough money to support higher prices so they are getting out.  Gasoline is still about $1.50 more than it was in 2004.

Answer 3

One word...

ELECTIONS!

Answer 4

Demand went down and complaints went up.  

Result: Prices went down, demand went up again and people were so happy to get a "discount", they stopped complaining.

Answer 5

Off shore drilling....just those words can allow for many things. :)  

Answer 6

the gov is manipulating the prices for the up coming elections, so you will feel good and vote republican again.

Answer 7

The prices have decreased, not by that drastic of amount here. Reason is because of the stock market and what a gallon of crude can bring on the open market and what the gas stations wish to choose. I agree about Goober. We have 4 gas stations at a 4 way stop, you can watch them all change prices daily. When one place raises price, the next 2 or 3 do, up/down, etc.  They keep driving the price up (higher than if you drive 2 blocks) and then on a busy day (Thurs/Fri/Sat/Sun), one station will drop drastically to take the majority of business. It is a shame how these gas places gouge us as the price rises every day, but they do NOT buy gas everyday hence no price increase in the fuel already stored in the tanks.

As for the drilling, the threat causes a bit of relief, differnt vehicle,s bikes and public transport threats do nothing. Gas Stations and Car companies know we are a greesy society (US) who all want bigger and better and the majority of people continue to drive for necessary reasons and un-necessary reasons. Whwn gas hit $4.45 a gallon for reg unleaded, our local news station did an interview and poll at the pumps and 3 out of 4 people stated they did not care about gas mileage, they liked the big SUV's and had no plans to change driving habits or use public transport as it is inconvenient and they would cut back else to pay for gas - what does that tell you about the US?  I was amazed and disgusted. Our local car dealers are advertising gas efficient cars getting 22, to 25 mpg and they think, as do many people, how wonderful that is!!  After living in Europe and extensive world travel I find myself amazed at how people do not care about cars in other countries. They pay high gas prices but they travel so little it has no impact, and if prices go too high they protest unlike US where all go along with whatever the govt says  -  

Answer 8

Cause people couldnt afford them that ridiculesly high