The reasons for high oil and gas prices? Will they ever go back to affordable prices?

Answer 1

Fuel prices are a function of several factors. Supply, demand, refining issues, political situations and other factors play into the cost of fuels. Crude prices are not as big a driver of gasoline prices as folks might imagine. About half of a barrel of oil becomes gasoline, but that doesn't mean that half of the cost goes to gasoline. There are very valuable fractions within crude oil that cost MUCH more per gallon than gasoline.

Refinery time costs money as well. If a refinery is producing gasoline, it's not producing some other product. If the other product is more profitable than gasoline, the refinery actually loses money making gasoline. Also, seasonal demands play into cost as well. Refineries across the nation prepare well in advance for the home heating oil season. Huge stockpiles of oil are built up to deal with the winter-long demand of keeping homes and businesses warm. Time spent preparing for that is done during the peak driving season of the summer.

The primary driver of gasoline prices is the global market. India and China are demanding massive quantities of petroleum to feed the growing industrial sectors and since the world isn't producing more oil, we're draining down an already scarce resource at an increasing pace. Folks snicker at the Chinese because they purchase mineral rights to oil that is difficult to extract and refine, but someday that's all that's going to be left and who will be snickering then?

The additional pressure they place on the global market affects our prices here in the US. Every barrel we produce is worth whatever anyone, anywhere in the world is willing to pay. Since we are currently the world's largest consumer of pteroleum and it would cost more to get our oil to the customer than the customer is willing to pay, we use all our production domestically. Don't think for a second, though, that oil companies won't start exporting if they can make a penny more a gallon elsewhere.

Will prices ever return to less than $2.50/gallon? Sadly, no. We are entering the death throes of the Petroleum Age and as oil becomes more difficult to locate and refine, prices will continue to sky rocket. The upside is that technological advances are being investigated and as oil becomes more expensive, these alternatives will become more attractive until they become preferable to oil and we will have a new energy source.

Did you know if we created a wind farm the size of North Dakota, we would have enough electricity to power the entire nation? Or that if we built a solar array the size of Nevada, we'd have enough power to supply the nation? We have the technology, it's just a matter of making it commercially viable. Ocean currents are another potential renewable source of energy that's being investigated.

Answer 2

Mostly due to lack of supply , but also there is much politics, war, speculation, and profit making going on.
Also many producing oil countries are under attack from within by terrorists, and sabotage to their infrastructure. Slowing production of available oil.



Last summer there were no major oil shortages, gas lines at pumps, or cities with no gasoline. Seems we would have had the same supply and demand at $2.50 a gallon as we had at $3.50 a gallon. So there is much more going on here than we can know.


Prices used to go down in the fall, yet this week our price went up almost 25 cents,
Barrel prices last year at about $68 a barrel devided by 20 = about 3.4 a gallon. Today is about $96 which = around $4.8 a gallon. Hopefully it balances back down or it could be a very expensive November.

There is so much truth, and propaganda going on here, it is almost impossible for the average citizen to really know just what the real figures are, we are busy just trying to work, live, and get by. With no real mass communication from the nation as a whole, the oil companies have us at their whim to charge what ever the market will spend.

Answer 3

we are running low on oil, and supply and demand is through the roof. Think about this, when your parents were your age they were probably paying about .05 cents to .25 cents a gallon. When I was a kid, I can remember it being .98 cents a gallon and some places it was $1.09 a gallon. All gas prices have ever done was gone up. Even during the gas wars in the mid to late 70's. Paying less than 2 bucks a gallon is a thing of the past.

Answer 4

because everybody is using more and more gasoline and the high price isn't causing anybody to cut back and use less, the ONLY way gas prices will come down if we all use less!
I blame the rich that own the big, gas guzzling SUV's, they can afford the high price of gas!
I think we should tax them outta existence, if you own a SUV, you pay a high luxury tax to own that SUV, and SUV's are killers, they have head on crashes against the poor little Honda Civics and the poor guy that's working 3 part time jobs to make ends meet so he can afford gas, that's driving the Honda Civic, dies in the crash and the driver of the SUV that caused the accident don't get a scratch!

Answer 5

Oil is a commodity that is driven by international demand. The US and China are the major consumers and as long as the demand is high the price will continue to rise. This country will have to develope alternative fuels or we will all go broke filling our tanks.

Answer 6

The NEXT time you get stuck in traffic- look around you, & you'll SEE the "reasons" for the rising price of gas & oil. More & MORE people, driving more & MORE cars- & using More & MORE gas & oil- that's fast running out. And BECAUSE it is running out, it's GOING to keep getting More & MORE expensive- until people start driving LESS, and FEWER, and SMALLER- cars... The Bottom line IS... gas is going to continue- to get Less & LESS affordable...-until we find some OTHER way to get around...

Answer 7

We're running low on Oil, we cant just drill anywhere for new Oil, and well it the end of society as we new it... i mean all in due time we're gonna take it up the tailpipe!
And no the prices of OIL or anything we use daily anywhere will ever go down! it's only gonna get more and more expensive, GOD help our children and their children!

Answer 8

$40,000,000,000 in profits a year for Exxon/Mobil. What do you think the gas prices will do.

Answer 9

The increasing scarcity of the resource is the main cause, bureaucracy and taxes would be second.

Answer 10

Americans are wasteful. They see cheap oil as an entitlement. Until they stop wasting it, it will be expensive.