Gas prices are high right now because of the tumultuous crisis in the Middle East. It does not have to with the amount of oil in the Middle East but rather the uncertainty and speculation that has arisen from the conflicts. The various uprisings and government overthrows have led to widespread political and economic instability which can have direct affects on the gas prices throughout the world.
Gas prices in the US are not even remotely high in August 2011. Consider that in most of Europe the price ranges from $6 to $9 per gallon. The points that jmendez mentions are valid, but the price of oil today mostly reflects perceptions of whether or not the global recession will increase or decrease. If recession increases, especially in the US, by far the world’s largest oil consumer, then the price of oil will decline as consumption will decrease during a down economy. If the economy improves, then the price of oil will increase, because a stronger economy will use more oil, increasing demand, and driving the price up.
The price of gasoline is directly proportional to the price of oil – with a few exceptions, such as hurricane damage affecting refinery production, or a major pipeline breach affecting delivery of product. Right now, the price of gasoline in the US is relatively low, and will in the next few days to weeks decline further as the decline in the price of oil, because of perceptions of the poor economy, impact wholesale gasoline prices and eventually, within weeks, the retail price of gasoline as well.
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