Open Wheel Racing! wrote:
What;s up with the cost of a gallon of gasoline. Its outta control. Anyone know why or how high this will go thanks
No one has explained it all yet. There are several reasons.
1) Weak dollar. The dollar will not be as weak as it is forever.
2) Speculators staying out of the preferred stock market. Investors PREFER the DOW and S&P 500, BUT when they believe the markets are not a good buy, they hedge by buying oil and gold. This is why oil and gold has risen over the last year (gold starting to retreat). This situation is NOT going to be there forever. The DOW has been as low as 11,700 in recent months and we just touched 13,000 again recently before dipping below again. This has all happened despite continued bad economic reporting. The FED and others have said the second half of 2008 is looking up. When things start to tick up again, oil will drop as speculators move out.
3) Supply. With the rising prices of gas, there finally has been a shift from large vehicles to smaller vehicles. People are also driving less no matter what vehicle they own. Supply has been up recently. A continued showing of that will help to lower oil prices.
4) Inflation and correction. The United States was benefiting from low gas prices for years. It's finally climbed where it should be. The Fed has said they are done or close to done to lowering rates. Inflation should stall as a result.
Prices will get even higher as we head into summer and there is a switch made to the summer blends. The price of gas though will NOT continue to skyrocket as it has in the last year (May '07 oil was $61 a barrel; May '08 oil was $125 a barrel; that kind of increase is not going to continue).
I've got a slightly less than 2,400 mile round trip car ride for vacation planned this summer. Do I worry about the cost? No. The vehicle I will be driving gets about 23 MPG on the highway. We'll use that as an average since most of the driving is on the highway. At $3 a gallon, I should spend $313.04 in gas. If I have to pay $4 a gallon it is $417.39. Oh no, an additional $104.35 in gas for a trip that will cost about $2,000. I can make that up in any number of ways -- two fewer meals out with the family while there, drive straight through on the way back instead of staying in a hotel, sell an amp on Ebay. It's not that big of a deal.
I understand that people who drive a ton to and from work each day spend a lot on gas. Move closer to work. Get another job. Work from home once a week, and if that doesn't work, and driving is required for your job, ask for a raise.