35 thumbs up

"Hello, Newman."

"Hello, Jerry."

High price of gas

In your view, why are prices for gas -- a/k/a gasoline or petrol -- at or near record levels?


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Among the many reasons I would count two that are very acute- The depletion of the oil in America, and the war in Iraq.


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First of all the main reason oil prices are high is OPEC, because they actually decide how many oil barrels will be extracted each day. Why do they set prices so high is for some reasons:

 


Equipment costs more and more as the oil wells become rare, in sea and at deeper levels in the ground.

 


Oil is a strategic resource with a high international demand, if OPEC countries wish that the rest of the world obey, they must fasten the “belt”.

 


There is no alternative, OPEC can do as they wish and people will continue buying oil!

 

 

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I believe the companies price the cost of their product on the spot price on the commodity/futures market.  Not what the product is actually costing them.  They buy contracts way out in the future on this market to protect them from the upside but do not pass this on to the retail market.

 

dkoug 


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"Hello, Newman."

"Hello, Jerry."

I'd say you've each identified a significant part of the problem.  Thank you all.


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