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Price of Oil Is Going Down Yet Gas Is Going Up: WHY
Does anyone know what is the real reason why this is happening?
It involves supply, demand and the lag between sale and consumption.
There have been numerous threads surrounding this "conspiracy" but basically this is political and 90% of the people here are incapable of having an honest discussion even if they did have a basic understanding of economics, finance etc. (which they don't).
The *real reason* you are likely looking for is that it is the fault of <insert name of political party you don't like>.
Basically, when this happened when Bush was president it was because he was helping his oil buddies and then the prices came down to "help McCain win the election".
Clearly now it is because the Democrats won't drill here or that their tax policies blah blah blah...just make something up...this is political.
When you say "The Price of Oil", you are talking about West Texas Crude, right?
Is West Texas Crude what we're using to make gasoline?
What if the price of West Texas Crude went down, but prices of other types of oil, which we were still using to refine gasoline, stayed high? Wouldn't it then give the appearance that "oil was going down", just because WTI was going down, even though it wasn't going down globally?
The main reason is lack of competition. Bush allowed a lot of these refineries to merge leading to vastly reduced market pressure on prices while he even on the screwed the small family owned gas stations by making it legal for refineries to force long term contracts to oil buy gas from one company. Before the local stations (other then the ones vertically integrated; I.E. owned by the oil company who owns the fields, who also owns the refineries, who also owns the stations... This is anther huge anti competitive issue which needs to be broken up) were free to switch from one supply to another based on who ever had the lowest price. Now many parts of the country only have 1 or 2 suppliers who both demand long term contracts (I.E. agree to buy only from us for the next 10 years or we'll refuse to sell you any gas, period) so we essentially have regional monopolies or at best duopolies.
Because domestic refineries are decreasing their capacity.
Which is another effect of the over consolidation and lack of competition. Normally a supplier constricting supplies in order to raise prices would be over taken by a competitor but when there is little or no competition plus every station has been forced to sign a long term contract locking them into just that one supplier there really is no competitive pressure. That's the whole point of their moves to begin with.
get off bush mod cut, some people act like the man done no wrong, no politician is immune to wrong doing an mistakes
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