General Question

chaosrob's avatar

Why is gas so expensive?

Asked by chaosrob (2214points) May 21st, 2008 from iPhone

Oil executives are saying that supply and demand doesn’t apply. Futures traders are totally unclear on what’s driving the markets. Crude seems to be in good supply. What is driving the cost if gas so high right now?

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9 Answers

marinelife's avatar

Hmm, this seems familiar. There was a fair amount of stuff in gas prices in this question from six days ago although it was posed differently.

chaosrob's avatar

Yeah, I saw that. I’m just trying to get a sense of what specific factors are currently driving the price, and how they managed to drive the price so high in such a short time.

marinelife's avatar

Chapter III of this IMF white paper is the most concise and data-rich explanation that I have seen of what I think is the primary issue—increased speculation. Look at the section on recent market entrants. That’s a staggering amount of money: $100–120 billion in the last three years. One of the big new players is the California Public Employees Retirement System (CalPERS), which has a staggering $242.4 Billion (As of March 31, 2008) investment portfolio.

MrKnowItAll's avatar

Driving the cost of gas higher.

Emphasis on driving.

Randy's avatar

Obviously money. Oil companies are like any other business, they’re goal is to turn a profit. With record sales being as high as they have been, then why not push the envelope more? Its not like they can’t. Gas has become a necessity so untill some law to help us out, or a new alternative (less expensive than gasoline) fuel comes out, then I’m affraid we’re stuck paying the high prices.

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SquirrelEStuff's avatar

The fact that it takes more dollars to buy the same item, mostly due to inflation of our dollar. The Federal Reserve should be abolished, back our money by gold and silver, and oil will be right where it was before Bush got into office.

Look at oil in dollars now and then. Look at gold in dollars now and then. It is almost proportional. Imagine if we paid for oil in gold aka real money, not money whose value can be changed by a few men.

The reason there are record profits in the oil industry, is the same reason for the increase in housing prices. There is more money being printed into the system, so it first goes to necessities, oil and housing. Everything Is on a bigger scale, except your pay of course. The federal reserve has only been around since 1913, and we need to see that it is only now starting to really catch up to us.

scamp's avatar

I read an article in the doctor’s office waiting room yesterday where the writer was saying it’s because China and India have tripled the amount of people driving over the last few years.

gooch's avatar

The weaked dollar makes it appear more costly.

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