Gasoline prices have been rising for months. By April 20th, oil price reached $111 per barrel, while gas price reached $3.84 per gallon. The interesting thing is that compare to the price records in 2008, when oil reached $147 per barrel and gas was $4.11 per gallon, the current gas price is catching up with the 2008 record faster than oil price is. Specifically, gas price was 7% off the all time record price in 2008, while oil price was 24% off its record. Also, gas price usually rise slower than oil price.
The article explained that the the oil price reported was for a particular type of oil: West Texas Intermediate storing at Cushing, OK. There has been an increase in the oil supply from North Dakota, Montana, and Canada, while little more pipes have been built, keeping the oil price low. Gas price, however, reflects prices of many other types of oil, and those oil types have had greater increase in price: London's Brent crude was closer to $124 a barrel on Wednesday.
Still, the number doesn't really add up. Gas price is still much closer to its peak than oil price. This might be that there were more subsidies on gas price in 2008, when the government wasn't as vigorously cutting spending as now.
2 comments:
Interesting article. I think the gasoline price was significantly lower several years ago because I recall there was an article about the United States' oil reserves. I recall that the Bush Administration began to release some of its Strategic Petroleum Reserve (emergency fuel store) in an effort to reduce the prices domestically. Right now I am not sure if the Obama administration is doing that to reduce the gasoline prices...
Maybe inflation in the demostic market in the USA is a another reason for high gas price. We need to compare gas price and inflation from the other countries to see if higher inflation within the U.S. leading to a high gas price. Also, I believe that if government releases some Strategic Petroleum Reserve will reduce the gas price.
Post a Comment