|
|
Gasoline prices back at the end of 2004 were found all over the United States at less than $2.25 per gallon and since that time there has been an increase with the west coast leading the pack. This increase finally stopped in August 2006 with gasoline prices at the 3.00 per gallon mark.
Prices of gas went down in November and drivers all over the country took a breathe of relief. The prices have started to climb again, and in a three week period have risen about .20 per gallon.
When you go to the pump you may, like many Americans, wish you could close your eyes, open them, and then have a nice surprise that the cost of gasoline is back the way it used to be when you were younger. However, this will never occur.
There will be fluctuation because of the different things that can cause the price of gasoline to go up and down. When you pay for one gallon of gasoline, 51 percent of it is the price of crude oil, 19 percent of the price is for refining, 9 percent is for distribution and marketing, and the last 21 percent is taxes.
Gasoline prices are normally one of those things that go up and down due to supply and demand, so in the summer months you may notice a rise in gasoline prices because people are traveling.
This was true in 2005 and 2006, gasoline prices were near $3.00 per gallon nationwide beginning around May through September, and then we saw a downhill slide from September until now to just above $2.00 per gallon. This does not mean that every state has the same gasoline prices; this is an average from all the states in the US.
If you look at the different sections of the US, you can see that the west coast and especially California is paying the highest price per gallon as of November 27, 2006, which is $2.49 per gallon whereas the gulf coast is only paying $2.12 per gallon.
The price of crude oil can change for many reasons, which will cause gasoline prices to change such as those we saw in 2005 with hurricanes taking out some of the oil wells, damaging the refineries but other problems can come up without the help of weather like problems with other oil wells, the cost of maintaining the oil well, prices for refining the oil, and the list goes on.
Even those that invest in oil stock have a hand in what you will be paying at the pump. Let’s say a large number of investors begin to invest in oil stock, this will cause the stock to be worth more and thus raise the price of the stock along with the price of gasoline.
On the other hand, if investors change their minds and wish to get out of oil stocks and into a different stock and sell most of their oil stock, this means that the stock will go down in price along with what we pay at the pump.
Gasoline prices do change almost as quickly as riding a roller coaster, however, if you listen and pay attention to what is going on in the world with oil wells, refineries, and even the stock market you may be able to see the larger picture and begin to forecast when gas prices will start to rise or fall.