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PRICE OF GASOLINE AND GULF OF MEXICO
A Sound Off item questioned why the price of gasoline was dropping while the BP spill seemed so big. Without a doubt the people and environment along the coast are dramatically impacted by the spill.
According to the Wall Street Journal however, price at the pump is based on world-wide production, which has been increasing. Crude oil prices have dropped about 20% since early April to around $70 a barrel, and expects pump prices to continue to drop in the near term.
The total impact of the BP spill will not be felt until the real cost of cleanup is passed on in the per-gallon price at the pump. If you look at the long term cost over the last two and a half years, it peaked in mid 2008 at nearly $4 per gallon, declined to a low of around $1.75 in early 2009, and has been increasing steadily since then.
According to the Wall Street Journal however, price at the pump is based on world-wide production, which has been increasing. Crude oil prices have dropped about 20% since early April to around $70 a barrel, and expects pump prices to continue to drop in the near term.
The total impact of the BP spill will not be felt until the real cost of cleanup is passed on in the per-gallon price at the pump. If you look at the long term cost over the last two and a half years, it peaked in mid 2008 at nearly $4 per gallon, declined to a low of around $1.75 in early 2009, and has been increasing steadily since then.
posted by Ed Fisher at
9:46 AM
1 Comments:
You're probably right but my memory of past price hikes are considerably different. It seemed to me that about 3 or 4 years ago when prices were approaching $4/gal, a custodian could call in sick at an oil refinery and the price would jump. I recall the threat of approaching hurricanes or some unrest in the middle east would cause prices to rise dramatically. This current situation is about to become one of the largest man-made catastrophe's the world has ever seen and the prices are falling. I am guessing this is what the caller was thinking of and is also my memory.
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