1. Everyone’s Gasoline Problem. We Are All Familiar with Fluctuating Prices of Gasoline at the Pump. Why Does This Happen? Research the Recent History of Gasoline Pricing in Your Area, and Attempt to Relate Any

Fluctuating gas prices are caused by a number of factors. The combination of the price of crude oil and the cost of producing and marketing gasoline have greatly impacted the fluctuation of gas prices that we experience on a daily basis. Crude oil prices are determined by worldwide supply and demand, with significant influence by the Oil Producing and Exporting Countries (OPEC) as they determine how much oil to produce and sell to other countries. The more crude oil OPEC chooses to produce and release, the lower the price. With an increase in worldwide demand for oil, including unexpected demand growth in China, India, and other fast developing nations. These nations have experienced a tremendous growth in the number of citizens who have access to automobiles, and their billion-person populations have a strong impact on the amount of crude oil needed in those parts of the world.

Currently, imbalances within the U.S. oil refinery industry have contributed to the steady increase in gas prices. With economic growth in the U.S., our demand for gasoline has increased greatly. However, despite the demand increase, domestic refining capacity has declined as a result of the refining industry operating with lower inventories of both crude oil and gasoline as a means of cutting costs. This has reduced their ability to meet sudden oil demands in the U.S., which leads to greater price pressure. With these domestic refining constraints, a greater proportion of gasoline demand has to be met with imported products.

Seasonal changes can have a serious impact on gas prices as well. Gas prices increase greatly during the summer and holiday seasons because American’s travel increases during these times. For example, the American gas demand increases by 5% in the summer season, resulting in higher gas prices during these times. The decline in the value of the U.S. dollar which is the currency in which oil is traded in the world market is also responsible for fluctuations of...