Crude Oil Goes Down While Gas Prices Stay High

Yesterday crude oil prices were the lowest they had been in seven weeks at $50.24 per barrel. This seems to be a huge drop from a couple weeks ago when they settled at around $57.00 per barrel. Oil prices are falling because of the US department of Energy's claim that the nations supply of crude oil grew last week by 3.6 million barrels. Gasoline inventories are also up 5.8% from a year ago (Jahn). All of this makes me question, why are gas prices still climbing?

I believe that one of the main reasons that gas prices are staying high is because demand is not decreasing. Think about it, do you ever have to go somewhere and decide rather to stay home because gas prices are too high? There might be times when you decide not to go somewhere that you want to go, but I doubt that is the case with most of us. The thought never really crosses my mind, if I want to go somewhere, I go. The fact is, gas prices can stay high, because we all keep driving.

1 comment:

Dr. Tufte said...

This has to do mostly with high seasonal demand for gasoline. A related factor is that we are still in the part of the year where refineries are retooling from winter to summer grades, creating temporary shortages.