OK, instead of asking why gas is so high now

[Jasongivm6]

Why was gas "not as high" 4 or 5 years ago.


I'm only asking out of curiosity and ignorance.

[GAVol]

I'm sure others can do a better job of articulating this, but in completely oversimplified terms . . . The market is in a state of uncertainty due to supply concerns brought on my middle eastern unrest and hurricane damage in the Gulf among other things. At the same time, world demand has skyrocketed in places like China and Russia.

Supply concerns + Increased demand = Increased oil prices = Increased Gas prices

As a certain coach gets raked over the coals for saying . . . It's a perfect storm.

[volinbham]

To add to what GAVol said:

Tighter supply with increased demand + uncertainty in oil producing nations (Nigeria, Venezueal, Middle East) has driven the price of oil up.

Further, there has been a steady increase of regulatory policies including the phasing out of MTBE? which has increased the refining costs.

Finally, there has been a refinery shortfall for years but Katrina and other hurricanes has put an even tighter constraint on refining capacity.

In short, both oil prices and the ability to turn oil into gasoline have come together to drive up prices.

If you want a very thorough explanation read the link below.

[attachmentid=5757]

[OWB]

[oklavol]

Originally Posted by (Jasongivm6 @ Aug 8, 2006 4:23 PM)

Why was gas "not as high" 4 or 5 years ago.
I'm only asking out of curiosity and ignorance.

IMO one reason, increased demand, reduced supplies. Its harder to find and more expensive to drill. Combined with more people wanting to buy it.

I take it we have no peak oil theorists in the house?