Why is the price of gas dropping so fast at this time of the year. I told it because summer is almost over and school has started and the producers of fuel cant sell the surplus of fuel they have fast enough to produce more. Whats your oppinion ?
2006-09-09 04:27:12 · 15 answers · asked by tadertotretard 1 in Politics & Government ➔ Law & Ethics
Popular conspiracies to the contrary, the price of gas and oil is the result of the balance between supply and demand.and the market's guess at the future relationship of supply and demand. As an internationl commodity it is the supply and demand all over the globe not just here that affects price.
Global supply is the function of many factors, that vary with the efficiency of oil production, refinery capacity, production stoppages due to wars breakdowns etc., new wells on line, old ones reopened, OPEC decisions on production.
Demand varies with coldness of winters and heat of summers, use of automobiles Chinese, Indian and other countries' needs.
gas prices vary geographically and within the country based on local transportation costs and local distribution facilities. gas prices like groceries, vary from town to town from servfice station to service station all based on competition in each market.
Pirces also reflet the investor view of future trends. This is why an outbreak of war in the middle east causes prices to go up though there has been no immediate effect on supply. the market anticipates [sometimes corectly sometimes incorrectly] the effect and increases or decreases prices accordingly. These adjustments are frequent but temporary until the reality of supply is determined.
When prices go down or up there is no shortage of experts who will rush into print or untop TV to tell you why?
The easy answer for your daughter is that gas is a market like everything else we buy and it will fluctuate up and down with supply and demand.
In short your answer was correct.
2006-09-09 05:07:05 · answer #1 · answered by Fred R 2 · 0⤊ 0⤋
The price of gasoline always drops at the end of the summer as (a) the summer vacation season ends when kids go back to school and (b) the refineries ramp up production of heating fuel for fall sales, which results in an increase in lighter fuels (ie., gasoline) as a by-product. That's been the historical explanation. With US refiners now claiming they run full out all year the heating fuel run up should not be a factor. So maybe it is all vacation driving.
2006-09-09 07:55:08 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Was just reading an article in the Kansas City Star...they said it was cause the price per barrel dropped some but also, the summer vacation driving was done and it will be a month or two before the heating oil demand picks up.
2006-09-09 04:36:41 · answer #3 · answered by Anonymous · 0⤊ 0⤋
3 things:
1) The epic: "Israel vs. Everyone else over there" is having an intermission.
2) Major new discovery in the Gulf has dropped futures prices
3) Summer is officially over with the start of school, which means a lot fewer trips to Grandma's house and the beach. Less consumption = cheaper fuel.
2006-09-09 04:38:47 · answer #4 · answered by Manny 6 · 0⤊ 0⤋
It's true, the prices go up during the summer months every year. The oil companies know people will travel so they can get more money. I guess it will go back up before Christmas holidays. However, this year some elections are coming up, and the republicans need to do something to redeem themselves to get the votes. Doesn't everything lead back to politics?
2006-09-09 04:35:17 · answer #5 · answered by ? 6 · 0⤊ 0⤋
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2016-12-18 07:27:08 · answer #6 · answered by Anonymous · 0⤊ 0⤋
in my opinion the reason the gas is going down is because we do less traveling this time of year. school is back in session. the oil companies are dropping prices because they think we will by more gas. and when we do the prices will go back up.
2006-09-09 04:44:37 · answer #7 · answered by grannyneva3 1 · 0⤊ 0⤋
whole sale price is slumping
price per barrel is around $67 from over $75
2006-09-09 04:33:00 · answer #8 · answered by BCOL CCCP 4 · 0⤊ 0⤋
There's an election coming up. It will probably go up again after November.
2006-09-09 04:32:47 · answer #9 · answered by mightymite1957 7 · 0⤊ 0⤋
Simple supply and demand: demand decreases, supply increases, therefore prices drop, plus it is election time!!!
2006-09-09 04:33:57 · answer #10 · answered by lambert_fan1967 2 · 0⤊ 0⤋