Gasoline Prices
Have you ever wondered why the gas prices go up and down for no particular reason? This is one of the more logical reasons. (I thought they raised prices just because they could)
The greates factor that affects the market is supply and demand. Oil is bought and sold by investors, traders and companies who use or make oil. On days when the demand is higher than the producers can provide, the price goes up. On days when more people are selling than buying, the price goes down.
Since most of the oil production is controlled by the Organization of Petroleum Exporting Countries (OPEC), production can be reduced to bring prices up. OPEC had been able to keep the price of oil around $30 a barrel for the last decade.
Major events such as wars, recessions, extreme weather such as Hurricane Katrina and Middle Eastern political instability affect the prices significantly.
Oil has become a worldwide commodity so competition for this limited natural resource has become fierce. In other words, if a country like China has an increased demand, the price America pays goes up because there is less oil on the world market.
As you can see, there are multiple factors that cause a price increase at the pump.
The greates factor that affects the market is supply and demand. Oil is bought and sold by investors, traders and companies who use or make oil. On days when the demand is higher than the producers can provide, the price goes up. On days when more people are selling than buying, the price goes down.
Since most of the oil production is controlled by the Organization of Petroleum Exporting Countries (OPEC), production can be reduced to bring prices up. OPEC had been able to keep the price of oil around $30 a barrel for the last decade.
Major events such as wars, recessions, extreme weather such as Hurricane Katrina and Middle Eastern political instability affect the prices significantly.
Oil has become a worldwide commodity so competition for this limited natural resource has become fierce. In other words, if a country like China has an increased demand, the price America pays goes up because there is less oil on the world market.
As you can see, there are multiple factors that cause a price increase at the pump.