What is cause the gas and grease prices to stir up continuously?
Answers: There are many reasons. First is the decline surrounded by the value of the American dollar, but just as big are decreased production in Venezuela, Indonesia, Iraq, and Nigeria (mostly due to civil problems), the increased constraint for oil in the United States and economically as increased demand in China and other countries, investor speculation on Wall Street, and finally the closing of masses small refineries in the United States contained by the 90s (due to stricter environmental standards) has caused a drop within the US production of oil.
In the end, it boils down to the canon of supply and demand. When there is more emergency than supply, prices go up.
It's Economics 101. Supply and demand.
China and India own economies now that hold taken off and are hot. China is pretty much the world's factory now (if you do not believe that, look at everything contained by your home and at Wal Mart next time you go there). That take energy. And that means grease. China now consumes more oil than the United States, and China does not enjoy oil reserves. So where does China (and India, etc) achieve it's oil? They buy it on the world market (from OPEC and other grease producing countries).
OPEC and other countries are producing oil at a fixed rate, and demand continues to increase, so surrounded by order to buy oil, if you are a buyer, you enjoy to bid a higher price for the oil per vat.
That is for the crude oil.
Now as to gasoline:
We have a fixed refining size in this country due to the fact that no brand new refineries have be built here in over 20 years! So you can only refine so much grease into gasoline. The break out of refined products from one barrel (42 gallons) of crude grease are:
Gasoline - 51.4%
Fuel Oil - 15.3%
Jet Fuel - 12.3%.
and the remainder is lubricating oil, etc
So one barrel of crude can abandon about 22 gallons of gasoline.
That is fixed.
The issue is that while our refining capacity is maxed out to engineer gasoline (they refineries switch a couple of times a year to refine home heating grease, diesel fuel and gasoline - they typically produce home heating oil within the summer months and gasoline in the winter months), the demand to gasoline and diesel fuel continues to increase!
Again, next to a fixed amount of something, and you increase demand, the price has no place to budge but UP.
Also, the government mandated the production of Ultra Low Sulfur diesel fuel, so that increases refining costs, and the cost of the finished product.
Our refinery are operating at capacity. However, refinery problems or things like Katrina can thieve a refinery down and put a crunch on the supply. Maintenance, explosions, hurricane etc can drive up prices.
Many of those supertankers you see coming in also have urbane gasoline in them.
Also, any unrest or world event can make buyer skittish and they will drive up prices at auction newly to be sure they get the oil for their companies. Iran rattle it's saber at Israel and it 'drives up prices' on the spot market.
So the issue is that we (the US) could have adjectives the oil reserves in the world, but unless you hold the refining capacity, it can't get to open market.
The ONLY way to 'drive' prices down is to do less driving and enjoy less demand. We are going into summer in a minute in the US and that is typically the season where on earth the demand is highest, but we only have so much gasoline to dance around. Supply and demand, supply and demand.
Combine that next to the weak dollar and prices go up. ALso, I believe that the primary oil producers now emergency to be paid in Eurodollars, not US dollars..
Actually, speaking as a true conservative, George Bush and his prepared lapdog Congress, have been printing US dollars resembling they were toilet paper, so the meaning of the currency has been flushed. Too oodles dollars chasing too few goods and services cause the convenience of the dollar to go down.
Quit printing money, and watch grease and food stabilize, usually, as long as the government stays out of it. But they won't. Just like food going up for multiple reason, not the least being that the establishment has diverted food to the biofuel debacle.
When the political affairs messes with the free market it won't work right any more...
Ron Paul understand it well!
right now, the dropping dollar. Oil is traded contained by dollars, and since our economy sucks and our debt is nearing 10 trillion dollars, the value of our currency drops, so the grease producers need more dollars, cause they're worth smaller quantity The weakening dollar combined with India and China's growing thirst for animation are killing us at the pumps.
only greed by the grease company's that ow er soldiers are dieing for,