Why The Heck Are Fuel Prices So Low Now

When I first got my driver's license the cost of gas was less than forty cents for each gallon. In my life experience I have observed fuel rates go well above 4 dollars per gallon. In the present day, in Texas, the place I live, fuel rates have fallen to beneath 2 dollars per gallon. So what gives.

There are a variety of factors at play which have an impact on the cost of gas. One of these aspects is the season of the year. For the summer months driving season refineries generate a fuel that is developed to burn cleaner in order to meet government emission standards This procedure starts in February and ends in June. When the fall season arrives these refineries turn their attention to delivering a gas product which includes more butane, which is less expensive than other additives and which assists to lead to decreased gas costs Drivers can expect fuel prices to stay lower until February of the second year when the process is reversed.

An additionalreason for diminished gas costs is the current glut of of crude oil at the moment for sale in the marketplace. For the past few years crude oil costs have regularly been over one hundred dollars for each barrel. At the present time, the fall of 2015, the price of crude oil is beneath fifty us dollars per barrel.

The United States, in the past few years, has witnessed its domestic oil production roughly double. This means that we are importing significantly less oil from abroad and this results in lower gas costs at the pump for us as drivers. While oil production in the United States has increased, oil production from other places has not slowed and this has lead to an overabundance of oil on the worldwide market.

While there has been a overabundance of oil there has simultaneously been a cut down in the demand for oil. The economies of some nations have weakened and as a resulttheir need for oil has decreased as well. While this has been going on motor vehicles made in the present day are getting better gas mileage than was the case in the past. I myself drive a motor vehicle that gets fifty miles to the gallon. I don't stop at the fuel station more than twice a month.

With that price of fuel for our cars falling there has as well been a decrease in the charge for additional fuels like diesel, heating oil and natural gas. Over the next twelve months it is estimated that the typical United States household is going to save over $750 in fuel. This is unmistakably good news for us as people, but as soon as there are winners there are also losers.

When oil prices plunge the principal losers are the nations whose economic systems rely considerably on the export of oil. These types of nations include Russia, Brazil, Venezuela, Iran, Nigeria and Ecuador, just to name a few. Any time oil values decline the economic systems of states like Texas, Oklahoma, North Dakota and Alaska, among others, are adversely affected.

On a more micro level, when oil prices go down this inexorably leads to some oil producing firms going out of business. The aftereffects from this means lost jobs and undesirable loans for the bankers doing business with these companies.

Many have questioned exactly why OPEC has not stepped in to assist to lift up the price of crude oil. To date the members of OPEC have refused to decrease their production levels. These members have articulated the fear that if they diminish production levels and the price of oil grows they will not be primed to meet that demand and will lose market share to others.

Although oil prices are certainly not projected to increase in the near future, one thing is for certain, the history of the oil business is one of boom and bust, thus foretelling a change in oil prices happening at some time in the future.

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