Whats Up With Gas Prices?
As gas pricing ranges weekly, the more the impact on the financial market and the economy. If the prices will go high enough, the negative effects will spill over to stocks and the economy. If oil prices reach more than 33 percent in a six month period then the stock market performance tends to weaken according to John LaForge, commodity strategist at Ned Davis Research. f gas goes to $4.50 a gallon and stays there, it would cost each household about $1,000 more this year than last to buy the same amount of gas. That would eat half of the $2,000 savings a typical household will get from this year's cut in Social Security taxes.
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Syria is not a major oil producer, but approximately a third of all of the crude oil in the world is produced in the Middle East. Are you ready to pay four, five or possibly even six dollars for a gallon of gasoline? War has consequences, and a conflict with Syria has the potential to escalate wildly out of control very rapidly. The side effect of higher oil prices could end up being rising prices at the pump.
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Wow I can't imagine having to pay $6 a gallon for gas, that's a pretty scary thought. Although rising gas prices seem to be bad for everyone, think about producers of hybrid cars. When gas prices go up more people want to buy hybrids so I bet they actually see an increase in sales. No matter how bad something may seem to you, there is almost always someone else who benefits from it.
ReplyDeleteYes, gas truly shows the amount of inflation in our economy over the years. Although gas is an inelastic good, there will become a point where the average person will not be able to afford it anymore. Also with rising gas prices, it creates a domino effect towards other companies because people have less money to spend on other products.
ReplyDeleteIt's amazing how much gas prices have gone up in the past decade. What really amazes me is how the government hasn't made any regulations or done anything about the over-consumption and affluenza regarding natural gas. Since gas is a nonrenewable resource, and we are getting relatively close to running out of gas and oil, the government should intervene and limit the amount of gas citizens are using since a lot of it goes to waste. If the amount of gas is limited then people won't take it for granted and use it more wisely.
ReplyDeleteGas is a touchy subject for many people because while we hate to pay high prices, it is an inelastic good that we all need to get by. We really have no choice. However, where and how we chose to gather our oil can have lasting consequences. We have to make sure and play nice with those large countries providing us with the oil. Mr. Douglass even claims that WW3 will be over the last drop of oil. I think you did a nice job explaining the issue at hand, with the constant inflation of gas prices, maybe next time you could talk about why and analyze your data a bit more.
ReplyDeleteThe thing is, America actually gets most of its oil from Latin America and Canada. Therefore, I'll have to disagree with your statement regarding Syria, but I will agree on the future rise of oil, just not because of the Syrian Civil War. As will all non-renewable resources there is a fixed amount available, so eventually when the supply lowers of oil the only fate available will be that of higher prices; not just for oil, but for everything because oil is our main source of transportation. But, then again -- I'm simply stating the obvious...
ReplyDeleteAmerica uses other countries all the time to get oil and we have had many complications. I diagree with the raise in oil prices due to Seria war. People hate paying high prices for things, especially gas; however it's nothing we can really control. If we get along with the other countries trading with us because then that means things will go smoother and they can possibly be more afforadable as well. I thought you did a great job with explaining the situation but you could go more into explaining the data more.
ReplyDeleteIt’s insane to even think about gas prices reaching $6 a gallon. According to statistics and the prices, there’s a very high chance of it happening too. Eventually everyone is going to be purchasing fuel efficient cars due to the tremendous prices. In this case, buying fuel efficient cars will be benefiting the sellers and buyers. The sellers will be making a profit and the buyers will be saving money on gas. Although buying more fuel efficient cars won’t entirely solve the problem of the amount of fuel there will be provided for everyone, eventually we’re going to run out completely. Within 15-30 years approximately half of the people who drive nicer cars will be driving something much cheaper to save money.
ReplyDeleteThis post considers some very interesting points, especially as gas prices seem to be dominating our news and political system. However, I think often times Americans blow this issue out of proportion. Many countries do not control gas prices, and end up with $5.00/a gallon or higher. However, consumers adapt by living closer together, using more public transportation, and biking/walking more often. I think as much as we Americans love complaining about gas prices, eventually we'll adapt in the same ways.
ReplyDeleteWith gas prices going up so much in the past decade, it is very scary to think about what could happen another decade from now. While we have some electric cars, gas is pretty much an inelastic good that will be purchased no matter because so few people have electric cars. In the future, Americans are going to either have to deal with paying around $5-6 for a gallon of gas, or change over to more electric cars. This has the potential to have a big impact on our economy. If everybody starts buying electric cars, the companies that make those cars are going to make a lot of money, and Americans are going to have to spend a lot of money switching over from gas to electric cars.
ReplyDeleteGas, probably the most important resource in today's society is decreasing largely every day rising prices. This is going to ruin the society unless we can switch to an alternative or substitute solution in which we have already started with electric cars and new innovations of fuel. This is one of the biggest impacts on our society and will stick with us until it all runs out. We are going to have to start changing the way we obtain the oil and in doing so may affect the environment in a negative way leading our economy on a downhill spiral. Since gas is rising at a linear model it means that not fast but slowly we are losing a needed resource.
ReplyDeleteGreat insights. The possibilities you reference in the end, about the conflict in Syria, are a great example of consumer and producer expectations. Depending on their perspective, this could result in either an increase in supply or a decrease in supply. If they anticipate a future rise in price, they might withhold their oil to sell later at a higher price. On the other hand, long term they will try to increase supply to be able to take advantage of that higher marginal return.
ReplyDeleteIt's amazing how gas prices have risen over the past decade or so. Personally, I think that the government should intervene way more in gas operations. As of now, there is no limit in the amount of gas each consumer purchases. Gas is obviously limited, therefore, we will eventually run out. If the government were to intervene, and limit the amount of gas each person uses, the prices would stay more consistent and would stay lower.
ReplyDeleteIt is clear that gas prices affect both the consumer and producer. Almost all goods are started somewhere, but finished somewhere else. Goods need to be shipped from place to place in order to have a finished product. The greatest problem behind gas prices changes is that it is an inelastic product, which forces people to pay the price. Lower gas prices allow for the consumer to spend their income on other goods and services, and overall put more money back into the economy.
ReplyDeleteWith gas being an inelastic product people are forced to pay the price, which is the biggest problem with it. With the amount of gas decreasing yearly there is going to be a constant rise, which is scary to think about. The smartest thing for our country to do is become allies or get on the nice side of countries that hold the largest amount of oil, otherwise things will go bad even quicker. Our government should also think about putting limits on gas so that it is all used to its max potential and not wasted.
ReplyDeleteObviously everyone who drives needs gas. I know with many of us being drivers, it can be frustrating having to put almost all of our paycheck right in our gas tank. With gas being limited, it makes sense why people are willing to pay a more as price rises. And on top of that, we don't really have a choice and we can't avoid getting gas.
ReplyDeleteThe price of gas is definitely a subject that many can relate to and many can argue about. It is a limited resource that is very inelastic because we need it so badly to make our way around in this society. It is scary to think that a material that we rely on so much could essentially be gone at some point in the future. There is such a demand for oil as so many of us drive cars, but on the plus side we are finally coming out with more fuel efficient cars. Now, I know this probably won't solve the overall problem, but it is definitely helping the cause. If we continue to use our limited resource more efficiently or advance to battery operated cars, maybe we wouldn't have such a problem with gas. These are the solutions for now. Maybe in the future we will have a new primary source for transportation.
ReplyDeleteThis article really opened up how expensive gas is, and how the price might only increase. It is obvious that whoever drives needs to pay for gas, and with the average income being very minimal for most families, it is obvious that the government needs to do something about this. However in bigger cities like New York, or Chicago it is easier to find a bus or trail to ride on, but here in Pewaukee it is harder to get from one side to the other without having to drive somewhere. Hopefully in the future we will find an alternative to high gas prices.
ReplyDeleteSix dollars a gallon for gas is an eventual economic inconvenience. Yet, rising gas prices directly effect the demand of hybrid cars by rising it and increasing profit for it's producers. It's intriguing how in our free-market economy, someone always seems to benefit from others failures and struggles. It keeps everyone on their toes and allows for more opportunities to open up in the future.
ReplyDeleteGas is a limited resource, and we, as consumers, are willing to spend ridiculous amounts of our money on gas to drive our car. It is a highly inelastic good. We are willing to submit to the changes in price because there is not many substitutes. Sure, there are electric cars, but quite honestly how many of us own one of those? Eventually gas will have a suitable substitute and the majority of people will use that if it is a better option.
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