Why Are Gas Prices So High?

Why are gas prices high? How does it relate to economics?

Does it have to do because the barrels are over $100? Who's fault is it? Is it really Bush's fault? Again, how does this all tie into with economics? Suppy and demand?

Public Comments

1. the oil price is determined by supply and demand, however there are a lot of politics played into it. we can make oil rather useless though if we are able to generate as much or more energy in a cheaper and more environmentally friendly manner. they should have been working on this sooner and we could have vehicles out by now.
2. Supply and demand. China and India, nations of over 2 BILLION people each are now buying cars and electric goods for their homes. Their economies are flourishing and their use skyrocketing. The Middle Eastern oil cartels have decided to NOT produce one more barrel of oil, even though the worlds consumption is doubling. Result? They make even more money, there is less oil to go around and we all pay more. Pretty simple. The cartel pulled the same crap with us back in the 70s when Japans consumption took off. And this reality, coupled with government ignorance (just like now) led to a huge recession. If you weren't born, or don't remember it, you better pull out some old newspapers and read up. Almost all the things that led to that recession are in place once again. And no politician is even paying attention to it.
3. Gas prices are going high because the government is losing money from the war in Iraq. So, the government needs more money to make more decisions.This all ties with economics because it has to do with government and social studies.
4. This is not supply and depand, this is expecting change in future supply, also oil is priced in dollars and as the price of a dollar goes down oil has to go up
5. There is no one reason that causes oil prices to increase. The fact that the United States has not increased its oil refing capabilities since the 70's is one reason. This has caused shortages of gas when the supply of oil was sufficent. The mandatory use of Ethanol is another. Corn prices have skyrocketed recently because of the production of ethanol which produces less than .3 percent energy than what it uses to produce it. Thats oil energy that it uses to produce it. Add to that the increasing demand for oil in China and India and OPEC's refusal to increase oil supply and you have higher prices. The fact that substitute fuel will not become cost efficent until oil reaches $130 a barrel is pretty important as well.