I keep hearing that gas prices are due to rise as a result of the gulf disaster

[randr]

I also see that the use of gas has fallen dramatically as a result of the economy.
If demand is down why are prices going up?

[Warpy]

1. Gas prices will be up because the spot market price will go up

because commodities traders are idiots who don't realize that we're drowning in oil right now with demand down worldwide.

However, the light crude produced in the gulf is the type that US refiners handle, so it was probably contracted here. Since that contract won't be delivered (oil mixed with seawater being pretty useless), there would be additional pressure on the spot market in a normal world economy.

[Ruby the Liberal]

2. That wasn't even a working well

They were still in the exploratory phase.

[BeFree]

3. Damn

You shot that theory all to hell...!!!

[Ruby the Liberal]

6. LOL! Sorry.

Gas prices are driven by market speculation anyway. If the meme is out there that they are going to go up, speculators will jump into the futures market and create a self-fulfilling prophecy (like when oil went to $140 for no apparent reason).

[taterguy]

13. The market speculates that the price of gas goes up because it usually does

The supply of gasoline is going down. Most of the oil that's easy to get to has been tapped.

But the demand is constantly increasing, since the global population is rising and relatively few folks seem genuinely interested in setting up their lives so they consume less oil.

So yes, it's rational to bet that prices will go up.

Of course if the people who hated "speculators" actually made changes in their lifestyles the speculators would lose their shirts.

But bitching about it is just so much easier than something that requires effort.

[Ruby the Liberal]

14. How do you explain the runup to $140 and then back to the $70s for no reason?

Oh, and I put about 4,000 miles on my car a year. Bought a house a few years ago where I did for that very reason. Thanks anyway.

[taterguy]

16. So if it randomly goes up and down, what's the problem?

Drive a lot when it's cheap and a little when it's expensive.

Alas, the reality is that the trend is for gas prices to go up.

Well, I'm pretty sure that's the trend but I don't feel like researching it to be sure.

[Ruby the Liberal]

17. So you are firmly in the camp that speculation is not a factor in price tsunamis?

[taterguy]

18. I'm firmly in the camp that nothing is firm

Speculation plays a role in prices; but only because the natural trend is for prices to increase.

Speculators rob us, but they get away with it because relatively few people do anything to fight back.

If a significant number of people actually did something then it would be a much different story.

[Uzybone]

4. its called summer, which is around the corner (its 92 degrees today in Texas)

Every summer gas prices go up, with or without giant oil catastrophes.

[kimmerspixelated]

11. I know, you'd think we'd all catch on by now.

How obvious is it, to always raise the price just before a major driving season? The bastids!

[MindandSoul]

5. I'm sure gas price will go up, but not because of the oil disaster. . .

because of greed. . . and they will USE the oil disaster to fool us!

[OneTenthofOnePercent]

7. Who do you think will pay for the cleanup... ?

WE will, of course. BP sells an inelastic good and they caused this mess. Whether we pay for government agencies cleanup through taxes or privatized cleanup at the pump... we will pay.

[old mark]

8. Gas prices ALWAYS go up before Memorial Day - the "summer driving season"

begins then, and the oil companies cash in on all of us driving to vacations, long weekends, etc. It's an American Tradition!!!
Besides, they will use ANY EXCUSE to raise gas prices, if it makes sense or not...if you don't like it, don't buy gas...(HA HA)

mark

[Sal Minella]

9. When quizzed on gas price, any spokesperson for oil will get around to

referring to "switching over to the summer blends" or "switching over to the winter blends" as though the expense of these switchovers simply takes them by surprise year after year after year, not being an expense that can be computed in at all.

[Ruby the Liberal]

10. "simply takes them by surprise year after year"

:rofl:

[old mark]

12. Yeah - all that extra cash must be a shock.....nt

[killbotfactory]

15. It goes up and down for lots of stupid reasons unrelated to supply and demand

But that's how it works, so who are we to question why?

[ThomWV]

19. This is 5,000 barrels a day out of a total use of 14,000,000 per day for motor fuel

It is not so much as a flyspeck of our use and can not possibly have an effect on price - also, its absence actually helps the problem we have with limited refinery capacity.

[BrklynLiberal]

20. Because the oil companies can do anything they damn please???