TOP DRAWER ARTICLE

SeeSawing Gas Prices
by
HL Carpenter

Why are gas prices rising, falling, then rising again? Let’s see. The fickle finger of fault points to ...

• Winter, summer, bad weather.

• The U.S. government’s strategic stockpile buildup.

• Crude oil futures and the stock market.

• Gasoline taxes.

• Worldwide demand for oil.

• Major oil companies.

• Consumers driving too much.

If you live in California where gas is blended in a special formula, blame the lack of refineries.

And let’s not forget the Organization of Petroleum Exporting Countries (OPEC). Even though OPEC has increased output in recent months, a shortfall – bringing higher prices - is still possible.

Why? Because OPEC may be pumping close to capacity. If they are, there’s not too much oil left in the tank for emergencies such as an unexpected glitch in the supply chain.

Wow! Seems there’s plenty of blame to go around. So who – or what – is really the cause of unpredictable gas prices?

You may have your favorite bad guy to label as the troublemaker. But the true answer is probably less clear cut. A sampling of recent news reports indicates commentators believe the volatility you see at the pump is a combination of all the factors mentioned. Worse, there appears to be no relief on the near horizon, meaning prices will likely continue to fluctuate.

Originally published May 2005.

Last update: January 8, 2011