Why are gas prices going down?

Gas prices are continuing to decline, as they have been for much of the summer. Not that we're complaining, it's just that forecasts warned about a possible surge in prices in August and we have been bracing ourselves for the hit.

So, why are they continuing to go down?
The Energy Information Administration (EIA) had reported that gas prices may go up in August if weather disrupts refinery operations, but it hasn't happened yet. Looking at past trends, prices don't consistently increase in August. Since the beginning of the decade, gas prices rose in 2001, 2003, and 2005. They were steady in 2000, 2002, and 2004, and declined in 2006 and so far this year, as well.

Then what would cause a surge?
According to the EIA, weather is one influence. Late summer starts the hurricane season, which runs the risk of impacting refinery operations through power outages.

As people hit the road to try to sneak in their last vacation before school starts, the potential rise in consumer demand can elevate prices.

Another factor is how the prices were earlier in the summer. High prices at the beginning of the season can encourage extra supply to be produced and imported. If the supply becomes abundant, prices move down so long as the demand doesn't continue to meet it. This occurred last year and is happening again this year.

All this means good news for those vacationers trying to enjoy the last bit of summer. Get out now and enjoy a little relief in your wallet before the surge in demand drives prices back up again. And the roller-coaster ride continues...

--Liza Barth

Comments

[mike]

What are you talking about!!? Gas prices going down? WHERE? Not in the midwest! It's up to $3.10 here! I wish it was falling, but then they spiked it in 2 day, 50 cents higher!

[amanda]

I would like to say that I am in Northern Virginia where gas prices are not outrageous, but they are also not cheap. Just last week gas was at about 3.89, yesterday it changed to 3.79 and now today it is 3.69, why are gas prices going down so quickly? I don't get this whole pricing contest that all of these gas stations are doing? I believe that gas stations need to put it at a set price, I think that it is called "price gouging"

[Gary]

I have always wondered-How can one Exxon be 4.05 and another Exxon 5 miles away be 3.89 (as it is in the Frederick MD area)? Please tell me it's not the choice of some boob at the street corner who thinks he get if he charges more....If this is the case, that may be one place to start fixing the present insane price fluxuations in gas prices.

What do you think?

[Tcat]

The conservatives were blaming Obama when the prices were going up. I think they should blame him now that they are going down. Seems like the same logic.

[Kristyn Wicker]

thx 4 this page its gonna help with my science report!!!

[Jordan Ashley]

Well, here in Alabama, every single day they have dropped. LOW, I mean, we are all really happy right now. They went from $4.00 (in Florence, it was 5 when that went down in Texas) to $1.80. It's like, everyone is too scared to ask incase they go back up. No one is stocking up, we're acting like it's natural (aside from the excited gossiping). Why are they so low now?

[Darryl Metcalf]

The real reason why gas is coming down is because it should not have went up in the first place. The gas is coming down now because Bush is leaving the office and some one else now has control to stop oil and gas companies from price gouging. You did'nt expect Bush to help bring the prices down when he is invested in OIL did you? plus Obama and Mccain was talking about new energy sources and getting off of oil and gas so when the companies start hearing about that they made a decission to raise gas price now while we have Bush on our side and still in office.now they may be other little things that help to but the main reason is screw the people while we can.

[mark]

the gas price is 76 cents in eastern bc how much more is going down to