Gas News

With the ever increasing cost of gas, I, along with millions of others I am sure, are glued to news reports trying to understand just what it is that causes gas prices to fluctuate (read "go up"). You hear things about shortages, worker strikes in Central America, damaged pipelines, and calls to reduce consumption. As I have listened I have begun to wonder if there really is a straight story on why prices are the way they are. There was a time when I thought I understood and could rely upon the basic principle of supply and demand to regulate prices. However increasingly I hear news reports where production is up, consumption is down, and the prices continue to go up. Additionally I hear complaints that while consumers pay record prices at the pumps, "big oil" is reaping record profits. OK so if you accept that, then what do you do with news reports that there are refineries who have reduced their capacity due to their being unable to maintain the level of profit desired.

So to recap: We have oil prices that go up when consumption is up and when it is down and we have both record profits and reduced profit in on the part of the oil companies. Boy that cleared things up. Happy driving!