RLSH700

Here is the whole picture. After Easter prices always go up because weather is nicer outside and more people start to go on their vacations which means they use more gas. The demand has gone up and the supply is has not increased because we have not increased in our drilling because they won't allow the companies to drill because of the concern for the environmentalists peace of mind. The Chinese continue to use more and more oil now that they have jobs and are earning income and are buying cars and driving more. Further increase in demand. There is fear in the market that there will be a oil shortage which causes the price of crude oil to go up. Environmental regulations continue to increase on cars, which makes them less efficient, and the amount of environmental additives continue to increase in gas which makes the actual cost of making gas more expensive. No new refineries have built here in the U.S. in over 20 years because of environmental regulations, which means refined gasoline is harded to come by with little competition. We have to buy lots of it refined in other countries. Also the older refiners are getting old and less efficient which pushes up the cost. Taxes on gasoline are a huge part. They add around $.50-$1.00 extra per gallon.

I know this might sound crazy but prices are not as bad as what they could be. Gas in 2004 at one point was $1.85 with the price of a barrel of oil at $37. Now gas is around $2.70 with $73 a barrel of oil. That is just $1 shy of double the price for a barrel of oil, while the price of gas is only 68.5% increase where it could be $3.7 if the price of gasoline would double as the price for a barrel of oil has. They have become a little more efficient. The price ratio was $.05 per each dollar on a barrel of oil to $.037 per each dollar on a barrel of oil. It could be worse. If you want to see prices go down, you have to let the companies drill more oil. Don't worry these prices are not going to be high forever. Steve Forbes from Forbes magazine predicts it will drop next year to $35-40 a barrel. I just hope the politicians don't try to add any extra taxes to "punish" the companies because if they do that WE WILL HAVE TO PAY FOR IT because they will further raise the prices.