Gas Prices Finally Going Down?

Crude oil prices fall as supply rises. Prices of crude oil of gasoline drop to their lowest in nearly two months after data was released showing the rising supplies of gas and oil. The price dropped to $50.22 a barrel and then another $2 on Tuesday, after reaching a record high of $58 a barrel. So does this mean that us as consumers will also see a drop in prices at the pump? I sure hope so. As prices continue to rise, more consumers are finding alternate modes of transportation, such as buses, or car-pooling to save on gas. This has risen the demand for gas, and thus lowered the barrel prices. Hopefully the prices will drop within the next few months, if not, I fear that many families will be postponing far-away vacations and trips to compensate for such high travel expenses.

1 comment:

Dr. Tufte said...

-1 on Fred's post for poor grammar.

The economics is not well thought through here. If demand for gas has fallen (which I assume is what you mean) that will reduce its price. Why would that reduce the price for the raw material that goes into gas? That will only happen if there is a change in the derived demand for oil, and that isn't the same thing.