It’s difficult to get through a newspaper section in the business news without reading about gas prices. They bounce up and down and seem to bounce anywhere from $2.50 to about $4.00. Most Americans own some form of transportation and the frustrations that arise from high gas prices can be endless. But few of us take the time to understand exactly why it is that gas prices go up and down with such frequency. Is it all as simple as supply and demand?
Surely, supply and demand plays a major role in the availability and price of oil. The demand for oil is strong across the world now and there is a somewhat limited supply for all who want gas. The issue of supply and demand is perhaps no where as prevalent as it is in the US, where almost everyone drives.
Another major factor is the emergence of oil demand in other parts of the world. American has always been gas hogs, but now there is increased demand in China as well as India. Even the Middle East, rich with some of the largest oil refineries in the world, has become much more dependent on oil and gasoline that ever before.
On top of emerging competition for oil, it is safe to say the BP oil spill has done nothing to make oil any more available. In fact, it’s been quite the opposite. Consider that the ineptitude that BP Oil showed not only served to dump millions of gallons of oil into the ocean, but it was a major strike against deep sea drilling. The skimping BP did on safety precautions had the effect of a bad apple spoiling a bunch.
It doesn’t seem that gas prices will be coming back down anytime soon. The best thing we can do as consumers is to try and get by with less dependancy on oil.web hosting reviews