The true cost of a gallon of gas is tied to the cost of a barrel of oil. As the price of a barrel of oil rises, the cost of a gallon of gas rises. However, when the cost of a barrel of oil declines, it never falls back to its original starting point, which means the cost of gas will only temporally fall. After a brief decline, the cost of a barrel of oil will spike again and the gas price will increase to meet the new spike.
The 2008 high price of a barrel of oil was $147.30, and the high price for a gallon of gas was $4. Then when the cost of a barrel of oil fell to $30.28, the price of a gallon of gas fell to $1.64. The cost of a barrel of oil traded between $20 - 30 in 2003 at which time the average cost of a gallon of gas was $1.64. However, the cost of a barrel of oil continued to rise to the previous mentioned 2008 levels. Both 2009 and 2010 prices rose in response to increased oil prices, and 2011 is only in its first quarter and prices have begun to rise. As of February 27, 2011, gas prices have already reached $3.38 a gallon and a barrel of oil is at $97.88. When a barrel of oil reaches $147 again, then what will the gas price be?
What does all of this mean to the average consumer? What does it means to future energy prices? Why are the oil prices in such rapid increases?
All of those questions are tied to the diminishing supply of crude oil. Oil is getting more difficult to extract, and the cost of refining it is rising. However, the U.S. government is still subsidizing oil companies while they reap huge profits.
Therefore, the future of oil and gas prices will see an ever increasing rate, the consumer will have to modify their habits to keep their costs down, and, ultimately, the true cost of oil use will have to be accounted for. The true cost will force rapid change or the entire collapse of the U.S. economy.
The 2008 high price of a barrel of oil was $147.30, and the high price for a gallon of gas was $4. Then when the cost of a barrel of oil fell to $30.28, the price of a gallon of gas fell to $1.64. The cost of a barrel of oil traded between $20 - 30 in 2003 at which time the average cost of a gallon of gas was $1.64. However, the cost of a barrel of oil continued to rise to the previous mentioned 2008 levels. Both 2009 and 2010 prices rose in response to increased oil prices, and 2011 is only in its first quarter and prices have begun to rise. As of February 27, 2011, gas prices have already reached $3.38 a gallon and a barrel of oil is at $97.88. When a barrel of oil reaches $147 again, then what will the gas price be?
What does all of this mean to the average consumer? What does it means to future energy prices? Why are the oil prices in such rapid increases?
All of those questions are tied to the diminishing supply of crude oil. Oil is getting more difficult to extract, and the cost of refining it is rising. However, the U.S. government is still subsidizing oil companies while they reap huge profits.
Therefore, the future of oil and gas prices will see an ever increasing rate, the consumer will have to modify their habits to keep their costs down, and, ultimately, the true cost of oil use will have to be accounted for. The true cost will force rapid change or the entire collapse of the U.S. economy.