Oil prices drop with the weak demand.
Rachael Morgan 9-26-08 1:36pm
Gas prices finally began to drop from their all time high after hurricane Ike. With the record low supply of gasoline and low demand for gasoline in the past week, oil companies have been forced to drop their prices and in turn the gas companies have also been forced to drop gas prices.
“Oil products supplied over the last four-week period averaged 19.5 million barrels per day, 5.3% lower than the demand the same time last year.” Although the recent hurricane disasters have contributed to the drop in the demand for gasoline, the economic environment is the main reason for the decline in demand. The American people are seeing the economic struggles in the United States and are reacting with less extravagant spending, which includes gasoline these days. With Americans spending less on the unnecessary items like gas, clothing, and travel the economy is being hit even harder.
“Refineries operated at the lowest level on record in the week ended Sept. 19th, according to EIA. Refineries turn crude oil into usable products, such as gasoline and heating oil. Refineries only operated at 66.7% of their operable capacity last week, which was even less than the 73.9% run-rate that analysts had forecast.”
With the refineries producing such low amounts of oil it has giving gas companies the chance to gouge prices too unacceptably high prices, because of this unfair capitalist action the American people to become out raged and made them find alternate means of transportation. The demand for gas will continue to drop until gas prices are lowered and the economy has began to stabiles.
sourses sited http://money.cnn.com/2008/09/24/markets/oil/?postversion=2008092415
3 comments:
It makes perfect sense, the delicate balance between supply, demand and pricing. The over analytical approach to these studies is so redundant! I just want to be able to fill my tank and still have enough money to buy food!
It seems to be a lose, lose situation: Americans are worsening the economic problems by not buying and consuming while they cannot afford to consume because of the economic problems.
Its been tough struggling with these high gas prices. It is almost a tease when they go down because it seems like everytime that happens something will make them go up again. I think its amazing to see how the fluctuation of gas prices affects people so greatly.
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