Why is it that gas prices go up with speculation or for any reason?

Question

It seems like the reasons are getting more and more ridiculous. "Korea tested some missiles, so expect gas to go up."
What the f#$&?! Some Mexicans jumped the border, gas prices are going to go up. I spilled coffee on the rug, oh crap, gas prices are going up. It sickens me. Your comments?

Answer 1

Because the economic world learned from Enron that energy markets could be easily manipulated and that the media wouldn't bother digging up the truth. (It's too busy taking advertising dollars from the corporate giants and investment firms who are profiting off of it.)

Here's something to think about: If oil prices are skyrocketing, then why aren't the prices of everything associated with it also skyrocketing? We use oil for much more than gas. We use it to make all of our plastics, synthetic materials (like the polyester in our clothes), pesticides / herbicides that we use on our crops, the asphalt we make our roads with, etc., etc.

Those high oil prices we see are due to 3 major factors: 1) our ever-growing demand, 2) a supply that's not growing as fast as our demand, and 3) our own de-regulated energy markets. What we're paying OPEC and other oil-producing nations is much less than what we see those barrels selling for in the Business section of our newspapers. Yes, oil production is no longer rising fast enough to meet growing demand, and India and China are starting to cut into our share. But lower supply and high demand on our commodities market means more than just high prices -- they mean "speculation" and even higher prices! After all, this is the "next big thing" and the "place to get rich!" Like Enron and their artificial power outages in California several years back, the major oil companies can shut their refineries down for whatever reasons, artificially manipulating the supply.

And if you're thinking someone should investigate, don't bother. They learned how to handle that from Enron and many of the major investment firms: shred the evidence... or just don't record it.

Answer 2

Well, they don't. That's the point. What is the formula for gas prices rising? There are a lot of variables we are all aware of such as supply, the limiting of refineries, demand, world politics, etc. But also, gas and oil companies are oligopolies. They are not price takers they are price setters. Basically, they don't have to fear a lot of competition because it takes a huge investment to get into the field and there has been a huge investment made over the years to build the insider buddy system within government to protect the industry from competition. Some may even think that was prudent since it helped America become an economic superpower. It could be said that by giving these companies the perks and legislative advantages over the years that this nation has benefited.

The other side, of course, is what to do when the benefiting parties make the captain of the ship useless and set their own due course--to maximum profit? The next question being... is this happening? Well, I sure don't know. I am guessing just as you probably are. I am not privy to that level of detailed information.

I suspect, personally, that since oil revenues have peaked now we will see oil companies leveraging and buying out alternative energy companies so that they can gain control over the new best thing. They have maximized their peak revenues using the old systems and now will, finally, take a look at how to maintain their power advantage by being at the helm of the new emerging industry.

Answer 3

the most important reason is that oil is now traded on the futures market like a percentage of inventory. investors purchase up the oil futures coming up a synthetic scarcity and then carry on to them lengthy adequate for the cost to upward thrust and then promote them for a earnings. The oil agencies do not have any administration over the cost of a barrel of oil on the global market. If our legislators would enable the oil agencies get better oil from the better 0.5 and little ones components that we've in this united states the speculators doesn't ensure a earnings interior the oil futures markets and the cost for a barrel of oil would drop on the on the spot. Even earlier the oil become recovered the hazard of a more advantageous provide would reason the cost of the futures to plummet. So few people comprehend the way the oil markets artwork that's scary, and the media doesn't worry to coach the widely used public both. each and each and every of the pretend assistance available is aggravating and not in any respect in any respect helpful. the most important profiteers in oil are first the speculators, second is the authorities, and thirdly are the pension money that carry the final public of oil employer stocks, in that order. some politicians would want to take the income the oil agencies make out of the peoples pension money and enhance authorities spending, and the longer all of us is ignorant of how the oil commerce works the extra probably that turns into. this may smash an excellent style of the retirement money that all of us is relying on to stay off in old age making them dependant on authorities amenities justifying the roles of a few skill hungry politicians. ( you could ascertain out which political celebration helps this plan of action on your own , they're an same ones who persistently stand interior the way of improving accessible better 0.5 and little ones resources of oil )

Answer 4

Speculation makes more--way more--money than supply and demand ever could. That's why so many things are no longer based on the tried-and-true principle. Stock, oil, electronics, etc., all priced based on speculation nowadays. Some shmuck speculating this-and-that and, amazingly, prices change based on this.

All the company needs is an excuse for their price gouging to make people think "makes sense"--say, for example: Sony's PS3--and that's what they'll mark it up as. Blue-rays aren't even mainstream and Sony is acting like they will be, so they slap a $500+ price tag on that s**tbox. Speculation.

Give it some thought and you'll realize it's not just oil.

Answer 5

Daddy Bush and little Georgie are both oil men, they are in heavy with the Bin Laden family. ( Who does not associate with their brother Osama ). Slick Dick, Dick Cheney, also makes out good the way things are. The list goes on. Why is Iraq important? They need control of it to run their oil pipeline through. Why do gas prices go up? Last year Mr. Bush set up a comity to investigate that very thought. The answer?!? I am still waiting to hear the outcome of that investigation. I think the final report will come out just about the time he exits office. Hmmm......

Answer 6

Because we are all being crazy...Nothing seems to be as it was, everyting is related to gas and oil prices.
However, the needs for natural recources are increasing and there are some countries/governments who think it is funny not to increase production... So there is more demand than there is product.... prices go up.
If prices go up really fast, there are people who speculate so that will give a price boost as well

Answer 7

Did you know that taxes on gas have been more that twice the profits for the last twenty years? Wasn't easy to find that info (google, yahoo, etc) -- you try it.

Designer water that most people buy (more convenient than putting water into bottles yourself) is probably still more expensive, ounce for ounce, than gas. Supply and demand set prices in a free society, not politicians.

Answer 8

Well, I live in Australia ad everytime something happens in America, the price jumps about 15 cents. it's now at about $1.49 a litre, but it's been up to $1.59.

And I always find it quite 'amazing' that anytime there's a public holiday or long weekend, the price goes up sky high.... even though the government say the changes are 'out of their hands'... :/

Answer 9

i've heard that there are two formulas that they use for gas. one for summer and the other for winter. along with this the prices go up when they switch over. i dont know if this is true but i think that the companies feel that they can take advantage of us and raise the price for whatever reason they feel fit. if they say gas is so cheap then make it like 4 bucks and leave it. dont keep fluctuating up and down and up and down. it gets really annoying. thats what i think

Answer 10

It is just their way of increasing prices. I was at the pump when the owner came out to raise the price again. They aren't happy with four house, four cars and four yachts. They want a hundred. I am sickened also. It costs me $55 to fill up my one minivan. They must have their own private stash of gas.