Why is Gas So Expensive? (Script & Sources)
Added 2021-04-17 00:46:11 +0000 UTCGood morning! Bad news, gas prices are skyrocketing and are going to hit $3 (nationwide). This time last year, they were $2.08. So is this all Biden’s fault?
Not really. First of all, ignore anyone saying that it’s because of the KXL pipeline. Whatever your opinion on that may be, the pipeline was never finished so it’s not like there’s less oil now because it was stopped. It is true that projected oil can be related to oil prices, but in this case, it wouldn’t even be close to enough to justify an almost entire dollar increase.
Here’s a few clearer reasons: last year, oil prices plummeted because nobody was traveling, and now with the vaccine, not only are people traveling, but oil producers are expecting high travel figures in the summer, so with more immediate and projected demand, companies are buying more oil, so prices are going up.
But here’s another interesting thing: OPEC, which is a group of mostly Middle Eastern and Central African oil producing countries, plus Venezuela, but realistically all controlled by Saudi Arabia has been in a price war over oil with Russia. For the last year, they’ve been trying to cripple each other’s oil supply by overproducing oil, which leads to higher supply, lower demand, and a crazy drop in prices. it was actually one of the bigger reasons that the stock market collapsed in March, but we didn’t really talk about it because obviously pandemic. The oil war got SO wild, that last April, the price of oil went negative. It became too expensive to store the overproduced oil so it was cheaper to pay companies to take it. This is not normal.
Anyway, the price war is still ongoing, but with higher demand it’s nowhere near as bad as it was. So, sorry prices are higher, but they were never supposed to be that low to begin with.
