Why Have Gas Prices Gone Up and When Will They Return to under $2?

Question

I know Hurricana Katrina destroyed some reserves, but hasn't enough time gone by to reinvigorate the supply? Why haven't prices gone back down to like they were before to about $1.20?

Answer 1

http://inflationdata.com/Inflation/Inflation_Rate/Gasoline_Inflation.asp
http://www.energy.ca.gov/gasoline/statistics/gasoline_cpi_adjusted.html
http://www.randomuseless.info/gasprice/gasprice.html
http://www.factsonfuel.org/gasoline/index.html

Actually in inflation-adjusted dollars, fuel has been going down, down, down for the last 100 years. We're at a historic high, but we're paying no more than people did in 1920, World War II and the 1981 crisis.

So if patterns continue, once this spike is over, gas will drop to your $1.20.

Except that it won't.

I'm told that the first few lowerings were due to new oil fields opening up, and the all-time low in the 1990s was due to OPEC selling oil super-cheap to undercut (and destroy) alternative fuels and electric cars. Grats, OPEC, they won that one.

Now, the pressure on oil prices is the cost of exploration, the impact to the environment (we may not believe in global warming, but if OPEC does, that's enough), and the small matter of India and China's emerging middle class, that's 2.4 BILLION (8 times our population) who want to live like Americans and own cars and buy fuel.

So $1.20? I think that's a goner.

Of course, when gas was $1.20, people were very upset that it was no longer 45 cents, and they had gas-outs and protested and demanded that the government intervene. Who knows, maybe in a few years you'll march on Washington demanding gas prices be lowered to $3.50 again.

Answer 2

NEWS FLASH:
GAS WILL NEVER GO UNDER $2 A GALLON
(why you ask?)

#1- Before Katrina we were paying over $2 a gallon, at least I was.
#2- If were paying $3.30 per gallon now, with very little to no spike in gas sales. Why would gas companies lower prices under $2?
#3- Simple fact is we need gas. Until we stop using gas like its water, gas will cost more then $2 a gallon.
#4- Oil is not renewable, meaning the less there is the more it wil cost.

Answer 3

Oil is in higher demand worldwide, so the base oil price has gone up.

Refineries are stretched to capacity because we haven't allowed any new refineries to be built in the last 30 years. We've also prohibited drilling for new domestic oil supplies. We've been driving more, and buying vehicles that get worse fuel economy than 20 years ago.

In other words, supply has not kept up with increased demand for oil, and for refined gasoline. Thus price increases.

Demand your elected representatives start drilling in ANWR and anywhere else there is oil, and also that they start allowing new refineries to be built. Also, try and cut back on your use of gas. We all need to do it. Stop buying SUVS and trucks, take public transit, car pool, etc.

Answer 4

hahahahaha......................hahahahaha................hahahahaha............thats the funniest thing i have heard all day....haha........under $2..........haaaaaaaaaaaaaaaaaaa!@ that just made my day....THANK YOU!