why are gas prices so high?

p3|......D...S...............

....|.........DS.............

p2|...........S..............

....|...........S..D.........

p1|...........S......D.......

....|______S_____D__

.......Q1..Q2....Q3......

Theres my best shot at a supply and demand graph on here.

The line with all the Ds represents the demand for gas. This includes gas for your car and gas for heating.

The line with all the Ss reppresents the supply of Gas from oil companies. The Supply line is not completely vertical in reality, but thats the best I could do.

In the market represented above, Gas is supplied at a quantity of Q2 gallons. This could be any amount, so feel free to assign numbers to the labels. Just know that Q1 is less then Q2, which is less then Q3. Also, P1 is a lower price then p2, which is lower then P3.The price we pay for gas, then, is determined by where the Supply curve and the Demand curve cross, in this case at a price of p2.

imagine if the output of gas was restricted, so only Q1 gallons was supplied. The demand curve and the supply curve now cross at a level of P1, a higher price then p2. By ristricting the output of gas, oil refinries keep the price of gas high. This is how OPEC and many oil cartels operate and control the price.

Subsequently, If demand were to increase, the whole demand curve would shift to the right, like what is illistrated below.

p3|.........DS...............

....|............S.................

p2|...........S..D...........

....|...........S.....D.........

p1|...........S.......D.......

....|______S_____D__

.......Q1..Q2....Q3......

Here, demand has increased, raising the price of gas to somewhere between P2 and P3 without any change in the supply of gas. This is why when winter comes the price of gas goes up as demand increases for oil to heat houses. This also explains why it raises during the summer time when people go on road trip vacations.

Also, keep in mind that as the dollar declines, anything imported will become more expensive, including Gasoline. On the upside, anything we export will become cheaper for them to buy, meaning they'll buy more of it.

There are three reasons. First, we invaded Iraq and it was preposterously stupid. The US lacked the operating funds to do this and so borrowed heavily, about $1 billion per day from China. China is tired of loaning us money.

Second, the dollar is backed by the loans to the banking system in aggregate, the banking system is in trouble so the dollar is in trouble. Sellers of anything are not concerned with the "price," in dollars, euros or anything, but rather in what they can buy with the dollars they get for the oil. With the dollar collapsing, the price of oil is staying about constant in global goods purchasing power, but not in dollar power. Americans are now about 33% less wealthy than their European counterparts in the last six months due to currency shifts.

The supplies are dwindling. We may have already passed "peak oil," the point where no matter what technology you add to the process, you still get less out than before. We may have passed the maximum global production level for the life of the planet.

george w bush has to be the worst president of any country ever. he hasn't lifted a finger to help. So much for looking out for America and the people who voted for him. Laws need to be changed so money can't influance the representatives. In ancient Rome to be senator you had to have been rich first. Did the Romans know that poor senators were being bribed by special interests?

supply and demand, OPEC refuses to produce more barrels a day to keep up with demand. Therefore prices are very very high. We are at $110/barrel currently we were $60/barrel same timer last yr.!

Gas prices are high because oil companies are raising the prices for crude oil. Which you need to make gasoline.

scarcity