Charles Edison

"Economics, politics, and personalities are often inseparable." - Charles Edison

Thursday, January 13, 2011

Gas prices are raised as price of oil climbs

http://www.latimes.com/business/la-fi-0104-oil-gas-rising-20110104,0,7096207.story

This article shows that as the price of oil increases so does the gasoline we buy to fuel our cars to go to work, school, grocery store, and other places we need to be. The predicted price of gasoline for 2011 is 100$ a barrel. This is very high compared to last year, but in 2008 we hit $100.64. The price of gas prices per barrel will most likely hit 100$, but not any more than that. If it does go higher, then the consumers will cut back on buying gasoline which will make the prices drop back down some. This rise in gasoline and oil prices may be an effect of our economic recession and scarce resources. The more consumer demand of oil to make gas, the more the workers have to get the oil then refine it to produce gas. There isn't an infinite amount of it just to waste, like the oil spill in the Gulf of Mexico recently. That's most likely why prices have raised and will raise even more throughout this year, to make some people cut back on driving because it is a scarce resource. Also it may make people save money in the long run, because most people try to find many ways to save money these days no matter if it is two cents or $20.

7 comments:

James said...

The price of gas is a very visible economic reality. Does the price of gas affect all Americans equally? Is the price of gas elastic? Are there some factors that may interfere with the invisible hand as it pertains to the price of gasoline?

Smith said...

Gas being literally and figuratively the fuel for today’s society; do you think consumers would really “cut back on buying gasoline”? Would they give up other luxuries first?

Cara Sheffer said...

The price of gas could be considered an issue in some people's opinions, but today it has become more of a necessity than a want. Gas will always rise in fall due to the scarcity of it and our access to it; but in general, as gas prices rise everything else rises except for the economy. Abandoning something that nearly controls the economy would be huge and something that I think we cannot afford.

Alison said...

The rise in gas prices is also an opportunity for certain car companies to make money. Electric cars such as the Chevrolet Volt and the Nissan Leaf are gaining momentum. If people are having trouble buying gas, then an electric car may be a better option for them. That comes with other issues, like what to do if it breaks down/runs out of energy on the road, and then the price of the car itself. But as oil becomes more expensive and the state of the environment becomes a more important issue, the world may begin to transition to electric cars.

Payne said...

Like Alison said, rising gas prices create economic opportunities for makers of high gas mileage cars. But for a majority of people, buying a new car is not always possible. As gas prices go up, economic struggles only increase. Some other alternative to buying a new car must be established so that the average American can afford to drive on a daily basis.

Tyler said...

To Smith
I think people do try to cut back on buying gasoline when the prices get really high. Instead of getting in their cars and going on road trips, they spend time trying to find entertainment in their own cities. People try to carpool when they can or take public transportation. Another problem though when gas prices go up, other prices go up too. It costs more to truck products in so higher prices are charged to make up for the higher gas prices.

Ethan said...

At this point in time gasoline is pretty much necessary for the everyday person, especially here in North America. With this in mind do you think that people will actually stop buying gas until the prices drop or do you think they will begrudgingly continue to buy it? Also, do you think this rise in gasoline cost is just part of the natural increase of price of a product or do you think that something in particular caused the prices to rise?