Gas Prices On The Rise, 2 Reasons Why!
Posted on October 12, 2010
Filed Under Gas Prices
With the possibility of gas prices rising, it has been harder for many to want to have a Tuscaloosa Fleet Vehicle. Instead, people are racing to Santa Ana Toyota Dealerships to get the best gas-saver for their buck, because they’re going to need it! Even if gasoline and oil industry analysts are saying that gas and crude oil prices may go higher, it is almost sure to do so.
Don’t believe them? Look at the statistics and look up the Bastrop used car locator now! On Sunday the average gasoline price was $2.80, 32.6 cents higher then the same time last year! Perhaps we are just growing accustomed to the high gas prices, or that’s the highest it has been since May. Oh wait, it is the highest it’s been since May! Could we really be content with prices like this?
Even the crude oil prices have jumped up 4.2% this year alone! Crude oil prices cost $82.66 this past Friday, making it 11% higher then mid-September prices alone! Don’t forget about the 7% jump in the future heating oil prices either, because it’s happening simultaneously as those new crude oil price spike!
Most of these causes stem from:
1) Having a Weak Currency: Thanks to the weak dollar crude oil (priced in dollars) is more expensive because it does not hold its value very well nowadays. The higher prices from the weakened currency then cause the gas prices to spike because the extra cost trickles down the pyramid for the bottom of the pyramid to soak up, that would be us!
2) Inequivalent Oil Refineries: USA Gasoline refineries are operating at low capacities due to the amount of routine maintenance that it takes to keep these plants in business. In fact, at the end of last month the nations refineries were said to be operating at 83.1% capacity, which is the lowest rate of use since the end of March!
With these two reasons alone it is hard not to wonder why most analysts expect gasoline prices to be “essentially static” for the rest of the year! With this economy, how can anyone tell the difference between safe gas prices and dangerous ones? We should not be held victim of dependency to our own refineries that are already ill-equipped, but here we are. What do you think? Are we on an endless downward spiral or is this somehow going to level off at some point?
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