Why Are Gas Prices So High?

I just dont understand...Could someone please explain how gas prices are so high.Based on future supply and de

Public Comments

1. All I know is demand's going waaay up, besides America has to compete with China for oil... Well when supply goes up, the prices go down since say.. There's 500 PSP's and 250 people, with a surplus, Sony' could sell it cheaper and get the same profit. If the supply goes down.. It's like a limited edition of a trading card, it's rare so it's pricey.. If demand goes up... and you're the seller, you're the one in control of prices... Since regardless more people will buy it. If the demand goes down... people don't want it much so you'll have to lower prices to draw some attention to those smart buyers/cheap people/don't really care people. Right now, gas is very precious so (demand) is up. We're running out fast, (Supply goes down) and we need to buy buy buy( demand). With other countries who need it to, the (demand) goes up along with competition. SO we're paying more and more to get the oil barrels and probably need to make people pay more to repay debts.
2. Broken down to the most basic terms, the law of supply and demand mean that if buyers know that a certain type of good would be very sale-able because people want more of it than what is actually available, they can raise the prices to what they want. the reverse of this is if there is too much of a certain item and everyone knows that buyers wont really buy much of it, then the prices are brought down so that the sellers don't get stuck with their inventory. that being said, the use of gasoline/oil/fuel has continued to grow and will continue to grow unless an alternative power source is discovered. since the consumption of fuel/gas can be pretty much predicted, demand for oil is easily projected. now on the supply side, if the oil producers have already foreseen or decided on a limited production of oil/fuel, they have guaranteed themselves a favorable future scenario where their supply of fuel is going to be less than the demand for fuel. In anticipation of this, they can already justify the high prices of gas since the long-term supply to demand relationship is in favor of those who produce the oil.
3. gas prices are high because: 1. most countries that export gas make their great income on gas prices, so the government set the price per barrel gas. countries in the western usually set high prices to make high incomes while non-western countries want to lower the gas price. under bad economic conditions, a country wants to increase the gas price so the profit (income-cost) of a country is stabilized, if not the central bank has to raise the interest rate or tax. 2. the amount of gas is decreasing, but the demand is increasing, so they have to increase the gas price. 3. war and conflicts make it more difficult to export gas prices, so the availbility to gas is harder so the gas price increases. 4. the global gas organization oec which contains most gas countries in the world is giving a gas price line to base on.
4. 1) You haven't finished your question. 2) Quite a big part on price increase is due to market speculations, and market monopolization level (they artificially keep profitable level of supply to maximize profits and demand is sort of inelastic). 3) Part of increase in price is due to inflation rate (so change can be in nominal price but not in real price). 4) Global demand has increased and supply haven't changed much - it leads to increase in price. These are main residuals of this shocking prices.
5. Many countries want the middle eastern oil. I've been told that a big part of this Iraq war is over oil. I used to be one who drove an SUV, but had to resort to a smaller car due to the oil prices. We demand so much oil in USA and when other countries want it, prices go up, and up and up. I don't think $4. a gal gas price is the roof. Since this has doubled in a year, what will the price be in another year?????
6. Well, i'm not sure ,but i do feel this will be the ruin of americas financial stability. Meaning this will break not only our country, but all the people in it too... i always knew it would be the imported oil that would ruin america....Fuel prices are the biggest problem with our economy now, and has not even began to be high yet..Are you ready to spend your whole pay check to be able to buy fuel to get to work? sounds impossible? JUST WAIT!!!!