How the fuel company sticks it to us........ Kinda interesting

[▼)Ñ╩fZΣµ& 10+ year member]

wat.

 

[newusername 10+ year member]

The changes in oil prices, particularly of late, are driven by speculation and not by supply/demand. The changes in gas prices are primarily driven by the changes in oil prices. The caveat, of course, is that the gas price passed onto the consumer is a weak function of supply/demand.

There are varying economic stances on how supply/demand relates. Some believe that decreased demand will lower prices, but I believe it would have to be a significantly lower demand. I believe a decrease in demand would only result in an increased price for those who absolutely must have the supply, which is a large percentage of the developed world, who also happen to be the wealthiest. Increasing the supply may work, but I don't think the oil market is prepared for an increase in production that would be drastic enough to offset the cost of long-term speculation.

The only way that you can avoid paying ridiculous sums of money to use oil is to stop using it, and that is one hell of a tough feat. I suppose one could insert some form of regulation, and I am usually quite opposed to such intervention, but I doubt the market will correct itself before we have moved on to alternative sources.

 

[Slammed 5,000+ posts]

Crude has fallen about $55 — or 37 percent — from its all-time trading record of $147.27 reached July 11.

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its $92/barrell...yet $4+ a gallon here in NYC