The Unstable Change of Gas Prices Across the World
The price of gasoline is a major interest to almost everyone in the country and almost
everywhere in the world. It seems that every month or even more frequently, gas prices
are either rising or dropping but never staying stable. Gasoline prices are affected by
many factors, including the price of crude oil in the world market, supply and demand for
gasoline, local market competition, temporary supply interruptions, government
regulations, or taxes. Gasoline is produced by a distillation process where crude oil is
heated and fumes are captured and converted into many products such as kerosene, jet
fuel, and gasoline to name a few. Therefore the price of crude oil, which is extracted
from oil wells beneath the earth's surface, is a major factor in gas prices. The five
leading oil producing countries and their approximate shares of the world supply of oil
are: Soviet Union 21%, Saudi Arabia 17%, The United States 15%, Venezuela 4%, and
Mexico 4%. These five countries made up 61% of the world's oil production back in
1980. Even though the United States is a major producer of oil, it does not make them
self-sufficient. The United States uses more oil than they can produce and must look
toward foreign countries. Therefore, the United States is forced to deal with an
organization called OPEC The reason the United States goes through O.P.E.C., is not
only in its own interests, but also in the interests of its allies and in the interest of
maintaining world peace. OPEC which stands for Organization of Petroleum
Exporting Countries, is made up of 13 countries: Iran, Iraq, Kuwait, Saudi Arabia,
Venezuela, Qatar, Indonesia, Libya, United Arab Emira...
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...5 cents per gallon" (Chandler 1). Taxes in the United States have
increased an average of 15.6% in the last three years. Many factors influence the prices
of gasoline. The price of crude oil affects gasoline prices in the world market, supply and
demand for gasoline, local market competition, temporary supply interruptions,
government regulations, or taxes. Every day new things can happen to change the prices
that American consumers pay at the pumps. The United States is dependent on foreign oil
and must continue to ensure stability in the Middle East, or until we have found alternate
sources of energy. Taxes will continue to climb due to the rise of government control.
Regulations will continue to become stricter until gasoline usage is more
environmentally friendly. It looks as if gas prices will continue to fluctuate, but over time
will rise.
Gasoline is one of the many conversation starters anywhere you go. People have different opinions on why gasoline prices are fluctuating at such a rapid pace. Some Americans have chosen a way of thinking towards the prices. Whether it be making up rumors or just plainly trash talking towards our government. You make ask yourself the same questions many economist do, why has the price of oil been dropping so fast?
Almost every single nation in our world today, the United States included, is extremely reliant on oil and how much of it we can obtain. Wars have been started between countries vying for control of this valuable natural resource. The United States as a whole has been trying to reduce its reliance on foreign oil and has had some success, especially with the discovery of the Bakken formation and projects like the Keystone Pipeline.
Arguments: America is dependent on other nations for their ability to create energy. The United States is the world’s largest consumer of oil, at 18.49 million barrels of oil per day. And it will continue to be that way for the foreseeable future, considering the next largest customer of oil only consumes about 60% of what the U.S. does. This makes the U.S. vulnerable to any instability that may arise in the energy industry. In 2011, the world’s top three oil companies were Saudi Aramco (12%), National Iranian Oil Company (5%), and China National Petroleum Corp (4%).
...oline is affected by many different factors. The biggest factor is crude oil, but the supply and demand of crude oil will ultimately determine the price of gasoline. The supply and demand of crude oil and gasoline are also affected by several factors. The price is continually increasing and the supply is becoming harder to produce and deliver. So it seems we, the United States, need to find a way to slow down our fuel consumption and decrease our demand. This may be the only way to bring down the price of gasoline. I know I would not mind, because then I could use the extra $40 to buy a couple more DVDs for the kids to watch while we are running around town in the Expedition.
Fuel prices is an area of concern for the motor carrier industry. Fuel prices are at an all-time high, driving the industry to make drastic changes. Individuals in the industry believe that by reducing the demand for fuel is the best way to address the current fuel issue. One of the leading alternatives to this fuel issue could be natural gas.
"Oil Imports and Exports - Energy Explained, Your Guide To Understanding Energy." Web. 26 May 2011. .
Taxation and tariffs: governments may apply different clothes taxations, making it more difficult to sell in certain location. This in turn will influence the price as a consequence, mining demand in some countries.
Currently, the most important factor in the rise of gas prices is the increasing cost of crude oil. Unfortunately, the United States has three percent of the world’s oil reserves. (Horsley) In 2009, the United States was third in crude oil production as well as the world’s largest petroleum consumer. (e. I. Administration) Such consumption required and still requires the United States to import petroleum/crude oil from other countries.
Wright, R. T., & Boorse, D. F. (2011). The U.S. dependency on foreign oil presents many negative impacts on the nation’s economy. The cost of crude oil represents about 36% of the U.S. balance of payments deficit. Wright, R. T., & Boorse, D. F. (2011). This does not directly affect the price of gas being paid by consumers, but the money paid circulates in the country’s economy and affects areas such as the job market and production facilities.
Crude oil stocks are at long-term lows, with OECD inventories approaching the 2,300 mmbbl range and US inventories well below 640 mmbbl. US motor gasoline as well as distillates inventories are at record lows, just below 200 and 100 mmbl, respectively. Domestic demand, however, continues to grow, with robust mogas demand at around 8.5 million barrels per day trending upwards. A high demand for distillates at 4.2 millon barrels per day is surprising considering the warmer-than-expected winter. DOE data displays continued total inventory outperformance throughout 1999, peaking at withdrawals of 51.8 million barrels in 4Q99. Opec compliance has remained high. Low crack spreads indicate refinery discipline.
Economic: Gasoline prices, along with rising energy prices are the major concern. Jet fuel prices are at $2.80/gallon! However, many people would rather have items shipped rather than spend money on gas to go and buy the item.
What is the reason that gasoline and fuel prices are so high? Most people believe it is because of OPEC raising the price of oil. This answer is only partially true. In fact, there are several others factors that must also be taken into account when determining the cause of high fuel prices in the United States and in other parts of the world.
... Also important is the price of complements, or goods that are used together. When the price of gasoline rises, the demand for cars falls.
In "The Fuel Subsidy We Need," Ricardo Bayon raises multiple valid points based on the disadvantages of oil from fossil fuels, and the advantages of fuel cells. Bayon's introductory paragraph informs the reader of how energy-dependent America is in the world today, which in turn describes the topic of the essay. Bayon brings up the point of oil dependence and consumption in the United States, focusing the topic on a specific type of energy being consumed. "Overall the United States consumes 25 percent of the oil produced in the world each year (Bayon,100)." This quote is utilized to prove America's substantial dependence on oil; therefore proving Bayon's topic and providing him with credibility. By using statistics in the introduction, the author attempts to hook readers into reading the remainder of his essay in order to appreciate his point of view.