Gas Prices Falling in the US

[bb113]

Does anyone have an explanation for this? Don't say Obama...

[Electricbees]

Does anyone have an explanation for this? Don't say Obama...

Speculation over the Natural Gas boom?

[cadillac]

Barack?

[cbeast]

Hussein

[bb113]

deflation...   money supply is going down so the price is going down...

This is my interpretation as well, expecially since we are seeing a similar pattern in a number of commodities and stocks. I was hoping for someone more experienced to explain the recent cause of the deflation.

[benjamindees]

Fracking.

They're fracking up our water supply.

[silverbox]

Its not deflation.  Its a supply and demand issue.  The supply isn't as low as was previously thought (fracking etc putting new oil into the supply).   The demand is lower because the price is high and the economic slowdown.  Also it seems the rampant speculation in oil that was artificially driving it up has tapered off somewhat.

[juggalodarkclow]

election year

[notme]

All the Iran rumors drove it up in a time of waning demand.  Nothing happened and now all the reserves are full, so the market returned to reality from rumorville.

[bb113]

Ha,

Ok, so we have

1) Speculation due to news about alternative energy sources (natgas)
2) Trolls
3) Deflation due to banks paying off interest to other banks
4) Increased supply due to fracking, decreased demand due to deflation (see 3)
5) Election year... this basically means Obama, how so?
6) Speculation due to news about possible war with a major oil producing country which would influence future supply.

All of these are probably contributing factors, the deflation argument seems dominant to me just because other assets have been falling vs the USD for the last couple months as well. I still don't understand what the president of the US could be doing to have such a massive influence on oil prices.

[cbeast]

Are you kidding about the gas price being low? It does fluctuate. This is traveling season and if the price stays too high, people won't travel and businesses will fail. If businesses fail, then people won't be buying fuel. We've already seen a drop in fuel consumption over the last decade. The people profiteering off the war-based energy markets we have now are smart enough not to purposely kill the economy. This is the time of year they spend their 'hard earned' profits to vacation and give the slaves a short respite before they tighten up the bit again.

[bb113]

I remembered prices always rising in the summer, I guess the ramp up usually lasts until about May.

[mystery2048]

People are using less gas...

Simple...

Less demand = less prices

I doubt the supply has increased much...

[stevegee58]

It's Econ 101: supply and demand.

Energy prices in general have been falling, including gasoline.  Falling energy prices indicate declining demand for energy.  Energy demand is linked to economy activity and growth.  Global economic activity has decreased due to the financial crisis that came to a head in 2008.  As a result, global economic growth has basically stopped and the corresponding demand for energy has decreased.

Energy is used for manufacturing and transportation of goods.  If people aren't buying things then there's no need to make or transport them so energy demand goes down.

Gasoline's price action is not independent of energy in general.  It's linked directly to overall energy demand.

[stevegee58]

I think you're overcomplicating it.  The USD is still the world's reserve currency in spite of reports of its demise.

Econ 101 doesn't change; supply and demand are 90+% of it.  Energy demand is linked to economic growth:  No growth = no energy demand.  Simple.

[pekv2]

Everytime that dimwit spoke on tv, I seen the gas prices jump. Had obama stopped speaking on tv lately?

[mystery2048]

Oil isnt 100% neccesary for economic growth, certain things require more oil than others... Manufacturing for example... But as a general correlation at the moment, less growth could be related to less oil demand...

[Electricbees]

Regardless to cause, I'm lovin' the lack of pain at the pump. Driving 400 miles a week in a shitty sedan isn't cheap.

Until tax season.

[steelhouse]

It is not deflation!  It is the electric car.  They notice when gas prices go down, electric car sales stall.  Thus, they have to keep the prices down.

[GernMiester]

Simply less demand and too much supply. Dont worry the oil companies and OPEC will slow production and drilling to make it go back up.
ITS WHAT THEY DO.