What do gas prices go up? A shortage?

Question

Higher gas prices will not make more gas will it? All it will do is make the oil companies more money right? People are still gonig to use the same amount of gas no matter because we have to drive right?

Answer 1

It is increasing because it is needed for the war in Iraq. Also because the oil we use is from Iran and Iraq.

Answer 2

the nincapoop "imreallymean" has as bad an answer as you do a question.. it really has nothing to do with there being a shortage.. what controls the gas prices is the market pressure from the oil speculators.. they buy the futures on oil.. as oil prices go up..so do gasoline prices.. if oil were 50 dollars a barrell, the gas prices would be about 1.50.. to 1.75.. there is no shortage.. I our oil does not come from Iran or Iraq.. mostly it comes from Saudi Arabia and Canada and Mexico and a few others.. it is bought on the open market and the investors contol the price... until America gets away from the opec countries supplies,, the price will continue fluctuating.. just buy it and burn it..

Answer 3

Wow, I see not many people have a clue about simple economics.

If gasoline prices increased every year since 1981 at the rate of the consumer price index they would be about where they are now. So to say the price is 'high' is a matter of reference. If anything they had been artificially low for the last two decades. There is no single 'main reason' for the recent run up of prices. Many factors contribute to the price we pay for fuel including but not limited to increased world wide demand, relatively flat supply, instability of world markets, the realizeation the almost 50% of our oil is produced, refined or transits the Gulf of Mexico region that is vulnerable to disruption (hurricanes), minimal increases in refinery capacities, environmental regulations.
Many point to record profit as proof that we are 'over paying' at the pump. But this is not correct. If you have record gross revenues that would lead to record profits. An example, if you earn $10 on sales of $100 then you have made 10%, if you make $12 on sales of $120 your profits have increased to a 'record' but your margin is still 10%. Oil producers behave exactly like producers in any other industry. When inventories are low and prices are high, they produce more. When inventories are high and prices are low, they produce less. Basic economics people.

http://tonto.eia.doe.gov/oog/info/gdu/gaspump.html
http://www.eia.doe.gov/international/
http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbbl_m.htm
http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_history.html
http://www.gravmag.com/oil.html

Answer 4

The problem isn't oil supply right now. The problem is refining capacity. The oil companies have enough oil to refine into gas but they have had problems keeping the refineries operational.
The question is whether the problems are legit or created to drive up prices. In the past few years it seems each spring during the change over from heating oil production to extra gas production there have been a lot of fires and other malfunctions at our refineries. Each year the price has leaped up and then remained higher for the past five years. Someone is pulling the strings.

Answer 5

Wrong. Most people drive an inordinately amount of miles unnecessarily. E.g., my neighbors go out 5 - 7 times a day. The closest store of any kind is about 7 miles one way (14 miles round trip MINIMUM or 70 - 98 miles a day. This one guy is not working; he is not in school; I certainly hope he is not driving his big pick up all these miles to pick up one item at a time, but who know?
The point is, MOST people drive a lot of miles just for the hell of it. Add to that all these people driving ATV's, snowmobiles, golf carts, etc. (ON THE HIGHWAYS!) and you will see there is a lot of gas being burned for the hell of it, because most people have too much time and money on their hands.
As to the gas shortage, the CBS news recently said, "Everyone knows there is a shortage in the spring because that is when the refineries shut down for maintenance." Well, I for one had no clue that they would shut down half of their refineries at one time for maintenance; that doesn't make sense. Then CBS had some oil company representative saying, "The idea that we are doing this just to make a big profit is entirely erroneous."
Oh, yeah? When they make hundreds of BILLIONS of dollars in profit, they could cut the price of gasoline by a few cents, which would be a really big help for the working poor.

Answer 6

We're using the gas faster than we can make it. There's plenty of oil out there, but we don't have enough refineries to make it into gasoline. The last refinery was built in the late 70's.

Environmentalists don't want us to build new refineries, but i don't think they realize the old refineries are very inefficient. New refineries could work more efficiently, output more gas, and solve the bottleneck in production. Then prices will come down.

Answer 7

You and most of the answerers are in dire need of a principles of microeconomics course. The price went up due to an increase in (1) global demand for oil and (2) a seasonal increase in the demand for gasoline. Supply reductions due to refinery problems may have also played a role.

Holding all other things constant, an increase in price will result in a reduction in how much is used -- maybe not for every person, but in total.

People don't "have" to drive, but there aren't good substitutes in many U.S. cities.

Answer 8

There are several variables, some real, some fabricated that affect Gas prices and supply/demand issues that affect COST. (See wikipedia Article Below).

As gas prices get higher, it becomes more cost efective to get harder to reach oil in oil shale rock and deeper wells that are more expensive to extract oil from inartic regions and such (See business 2.0).

Oil manufacturers in theory re-invest much of their profits back into new energy discovery and some substitute alternative energy solutions (very small currently).

Answer 9

my friends dad, my chum n i talked bout this 2 day. i mean, we no its gona run out quickly yet on the 2d wev have been given planty. so y is it going so severe. i mean if the politicians n such people could take 2d and look on the gas expenses n do somethin bout it, we could proly get it flow into opposite 2 on the least 2 50 yet those people r stupid n to self obsesed so its basically gona shop mountain climbing until have been rungin on batery powerd vehicles wich isnt a bad concern besides the fact that it is that if u holiday allot. yet i realy wana no why its so severe and have been nevertheless paying for it so my answer proly didnt help plenty.

Answer 10

The gas prices only make the oil companies more money, sometimes gas strikes happen, but that dosn't make a big difference, they sell oil by the barrel, so the barrel cost increases, so the gas increases. The oil companies raise prices very unfairly and by doing this raise ther total profits. They don't nessecarily sell less gas, they just sell it at higher prices.

Answer 11

Higher gas prices will curb demand. Higher prices will also encourage more people to enter the market.

Some driving is necessary, but some is discretionary. You might choose to carpool or not go to a restaurant far away.