HEADS, I WIN –TAILS YOU LOSE!

In January, the average price per gallon was $2.01.…and here it is February, and the average price is $2.25, and yet the price-per-barrel is still averaging $40. Why the .25 cent increase in the short span of less than a month?

So, what’s with these gas prices? When a barrel of oil reached 150 bucks, prices at the pump exceeded four dollars a gallon. That’s when people stopped buying gas, and settled for the bus, carpooling, and bicycles. Four dollar a gallon gas was the tipping point. Demand for gasoline plummeted.

When people stopped buying it, the prices began a slow but steady decline…..and so did the price per barrel.

A barrel of oil now averages $40 dollars and the price of a gallon dipped to somewhere in the $1.90 range. But here in California, the price per gallon has jumped (very fast) for some strange reason. If $150 a barrel of oil caused gasoline prices to jump to historic highs, why hasn’t the drop in price per barrel shown an equal drop in a gallon o’ gas?

 

If high demand caused oil and gasoline prices to spike, how is it that LOW demand is causing gasoline prices to climb? Sounds to me like we’re being told “We’re raising the price of gasoline so that you’ll buy more of it. Keep buying more of it, and pretty soon, we’ll start lowering the price again…..or maybe not, because higher demand, demands higher prices.

A spokesman at AAA puts it this way: “Historically, gasoline prices follow the path of oil, but so far, that has not been the case in 2009. Refiners have cut back on the amount of gasoline being refined.” Okay….so they’ve cut back. Why? (Here it comes). They’ve cut back due to lack of demand, caused by the poor economy.

So, let me see if I’ve got this straight; HIGHER demand causes gas prices to rise. LOWER demand causes gas prices to rise. Reminds me of that ol’ sayin’ “ya’ can’t win, for losin’….or better yet, “heads, I win, tails you lose.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: