Gas prices have been going down lately, but I recently read an article about OPEC lowering oil output by over a million gallons daily so to control prices. The article also stated that the gas milage for popular cars is very bad. In short I guess I am wondering: What is the cause of high price of fuel? The industry or the consumers????
2006-10-21 08:15:41 · 5 answers · asked by ? 3 in Social Science ➔ Economics
I mean in terms of supply and demand, who is at fault for the increased prices?? is it OPEC for producing less so that we are willing to pay a premium or is it the fault of consumers, who continue to drive gas guzzling SUVs and cars and demand large quanities of oil.
2006-10-21 09:03:51 · update #1
It is all supply and demand. Both effect the price. Short supply by industry, high demand by consumers both increase price.
There are several specifics that are clouding your analysis.
Gas prices are seasonally cyclical. Prices always rise in the Spring and fall in the Autumn. This is because we drive more in the summer, with all those weekend trips and road vacations. So the real question might be is the price of gas this fall higher or lower than last fall?
In the summer more Oil is turned to gas. In the winter more oil is turned to heating fuel. This has lots of implication to your question. But the biggest is the supply of Oil from OPEC now is more likely to be turned into heating fuel and increase the price of that. Gas on the other hand is a different product. Who knows? there could be a larger than expected surplus of gas on hand from the summer.
Edit: Having read your additional comments, I still stand by my first paragraph. It isn't one or the other, they both are causing higher gas prices. OPEC cuts back oil, reduces supply and has an upward pressure on prices. People buying cars/SUV's not caring that they have poor gas mileage increases demand and has an upward pressure on prices.
2006-10-21 09:02:05 · answer #1 · answered by JuanB 7 · 0⤊ 0⤋
Its opec and the winter time heating oil, Alaska oil-piplines, and OPEC trying to maxiumize oil revueunes, but the price will go lower in 2009 to 2011 when new exploration and production comes along I bet since countries that are addicted to oil profits end in shambles in the end because they assume prices will go up, and up? I am sure they will take a more barrels of oil off the market in the next couple years, but non-opec countries could kick in other sources of fuel to offset it. Oil business is tricky I know that, but im not geologist, or oil trader on wallstreet
2006-10-22 01:19:48 · answer #2 · answered by ram456456 5 · 0⤊ 0⤋
Opec controls the price of unrefined oil. That oil is shipped to the US (or whatever country you are in) which is then taken to refineries which turn it into the products we use and the composites required for some products... oil, plastics, gas, diesel fuel and such... it is sold to the gas companies which has it delivered and then sold to you.
Majority of the price is actually in the freight and production... and quite a bit of it is paid to the gov in taxes.
2006-10-21 15:28:00 · answer #3 · answered by wizardslizards 4 · 0⤊ 0⤋
Election year... after November you'll see the prices magically going up, the oil companies control the prices there's no offer and demand in the oil industries, just exxon shell etc.. and friends in the White House
2006-10-21 19:57:59 · answer #4 · answered by class4 5 · 0⤊ 0⤋
It's about solar energy:
The reason gas prices are so high is because the gas companies don't own the sun!
2006-10-21 15:19:36 · answer #5 · answered by Freesumpin 7 · 0⤊ 2⤋