Gas is Good

Gas, gas, gas. This stupid three letter word often causes frustration, anger and long lineups at the pumps. As the price at the pump goes up and down, we can only hope that it will go down and stay down at prices a la the 90s, where gas never, ever, was more than a dollar a litre.

But what causes the price of gas to fluctuate? Gas is produced from crude oil, and to be really specific about it, it's more like the price of crude oil is fluctuating massively, which in turn affects what we see at the pump. Crude oil is extracted I think from all over the place, a lot in Canada and a lot in the Gulf of Mexico, and so when Hurricane Katrina and those other natural disasters tore through that part of the states, they recked a whole bunch of these floating oil rigs. And if you know the least bit about economics, you will understand that when supply goes down, demand goes up, and so does price.

Now, many of these oil rigs have been repaired and so the flow of oil has resumed. This means supply has increased and so there's less demand (remember when gas first dipped below $1.30 a litre? Remember how damn long those lineups were? Look at them now. Even when prices are below a dollar now - as they usually are - the lineups aren't nearly as long as they were). After people got their fillup of gas, demand went down and so prices have gone down as well.

What this means is a really sweet deal for us consumers and SUV-drivers, and a crappy deal for people who have stocks in gas. Too bad, so sad.

kamster