Gas Prices Fourth Quarter 2010

Gas prices fourth quarter 2010

The fourth quarter of 2010 saw gas prices rise to record high prices. In November 2010, the national average retail price for gasoline was $2.86 per gallon. According to the Department of Energy, the breakdown of this price was; 14 percent combined federal and state taxes, 10 percent distribution and marketing, 5 percent refining, and 71 percent crude oil. This means that the price of gasoline is essentially directly connected with the price of crude oil.

During 2010, we saw the price of crude oil rise approximately 15 percent. Because crude oil accounted for approximately 71 percent of the gas price in November 2010, we also saw a steep rise in gas prices across the nation. There were several factors that caused the steady rise in crude oil prices. Those factors included a weak U.S. dollar, greater global demand, tighter supplies, and the potential for another speculative frenzy such as the one in gold. One of the greatest of these factors has been the increased demand from emerging markets.

Going into the fourth quarter of 2010, we had already seen the demand for oil consistently grow for four straight quarters. The largest growth in demand for an emerging market came from China. The economic growth of China has been a large influence in the price of oil because "the geographic distribution of oil demand growth follows that of economic growth." This increased demand has also led to lower supplies of crude oil. Crude oil is priced in U.S. dollars. Because of this, a weak dollar will also cause the price of oil to rise.

Gas prices December 1, 2011

During 2011, we have seen the price of gas fluctuate quite a bit. As of October 23, 2011, the average price of regular unleaded gas was $3.47 per gallon. This was a rise of about 5 cents in just two weeks' time. The cause of this was a spike in the price of crude oil. This shows that crude oil is the major factor that affects the price of gas.

The price of crude oil has been fluctuating while Europe has been dealing with the debt crisis in Greece. It is clear that Europe still has a lot of work to do if they are going to get the debt crisis under control. It is very likely that the energy demand in Europe will fall while Greece and other countries cut spending to get their debts under control. Another factor that is causing the price of crude oil to drop is the fall in production in Japan.

Japan has reported that factory production fell in September. This was the first time it had fallen in six months. Japan is a country that is very dependent on their exports. Because of the fall in factory production, they produced fewer cars, machinery, and cellphone as the yen got stronger against the dollar and other currencies. This made foreign buyers less interested in Japanese products. As the interest in Japanese products fall, the factory production