Essay about Increasing Oil and Gasoline Prices - 1030 Words

We the American people have seen rising oil and gasoline prices continuously over the last few decades. Each year is slightly higher than the last. However, we have seen a few instances where oil and gasoline prices have spiked rapidly enough to invoke the American public to stop spending or cut back. The first time in recent history was after the hurricanes Katrina and Rita in 2005. Then, in July 2008 we saw a massive jump to the current record high national average of $4.50 per gallon of gasoline. Oil at this time was over $115 per barrel of light sweet crude which is the oil that American’s use in their gasoline. Currently the US oil and gasoline prices continue to increase. In the last month gasoline alone has risen almost 17 cents a†¦show more content†¦Thus, if the reason for the panic in oil prices is Libya then there really isn’t one. Considering that most of Libya’s export goes to Europe and it’s also in the form of Bent crude oil which A merican doesn’t even use. In comparison Egypt and Tunisia during their revolutions didn’t loose any oil exports. So again even as a whole the conflict in the Middle East isn’t a valid reason for this jump in oil prices. These events can have an effect on oil prices. However the evidence only points to a partial effect, not as much as some people would have you believe. The next most common used cause for the increase of oil prices is the explanation of supply and demand. Currently the world uses 85 million barrels a day, and currently the supply per day is only 80 million barrels (source). To reflect, the current market price of oil is roughly $105 per barrel. For those that say supply and demand is the main reason why I have a question. Why if the difference is 5 million barrels per day is the price per barrel of oil only $105? When in 2008 the difference between supply and demand was only 1 million barrels. At this time the price of oil was greater than $120 p er barrel and gasoline was closing in on $5 per gallon. Although regardless of the amounts the markets drive the price supply and demand does have its place. We are using more and more oil and gasoline and that will eventually drive theShow MoreRelatedThe Price Of Gasoline Prices1662 Words   |  7 Pageslast ten years, gasoline prices have been increasing in Canada. Consumer spending on gasoline holds a large amount of total household expenditures. In 2009, the Consumer Price Index (CPI) calculated on average that Canadians spent about six percent of their total household budget on gasoline (Statistics Canada, 2013). Therefore, gasoline prices changes on consumer price inflation. In order to make gasoline, crude oil and refineries are required. 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