The Rise in Gas Prices
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This paper explores the causes of gas price inflation, and addresses the issues of demand, global politics, speculation, seasonal trends, and fuel efficient cars. The paper considers possible solutions to rising gas prices and discusses increasing offshore and onshore production, releasing access to American resources such as approving the Keystone XL pipeline, and not increasing taxes on American energy.
From the Paper:"Gas prices rise and fall based on a specific factor. The primary element that effects this change is crude oil. Crude oil is petroleum. It is primarily composed from hydrocarbons. (Motavalli) As crude oil prices rise gas prices mirror the inflation. Gas prices are also lowered as crude oil prices decline. The global demand for crude oil in relation to the world market directly affects the local and global price of crude oil. Therefore, the demand for the substance also effects local and global prices of gas. (Mu)
"Demand may be identified separately as a cause for the rise in gas prices. Once the recession hit crude oil demand was depressed. Therefore, gas prices were depressed. Once the recovery took place more people began working and driving. This caused a increase in the demand and prices began to rise again. The trend is global. Within the United States gas consumption actually decreased. However, because the world consumption increased the demand increased resulting in a price increase. (Motavalli)
"Global politics is an additional cause to be identified. The Iranian blockage of the Straits of Hormuz provides an exemplification of this. As much as a fifth or international oil is generated through this means. Once it was cut off panic began and an increased demand was encountered. (Motavalli) An additional example is provided by sanctions imposed by the United States. The sanctions caused Iranian production to fall and demand to rise."
Sample of Sources Used:
- Balke, Nathan S., Stephen PA Brown, and Mine Yucel. "Crude oil and gasoline prices: an asymmetric relationship?." Economic and Financial Policy Review Q 1 (2001): 2-11.
- Hamilton, James D. Understanding crude oil prices. No. w14492. National Bureau of Economic Research, 2008.
- Motavalli, J.. N.p.. Web. 20 Jan 2014. <http://www.forbes.com/sites/eco-nomics/2012/03/05/five-reasons-gas-prices-rise/>.
- Mu, Xiaoyi. "Weather, storage, and natural gas price dynamics: Fundamentals and volatility." Energy Economics 29.1 (2007): 46-63.
Cite this Cause and Effect Essay:
The Rise in Gas Prices (2014, February 12) Retrieved September 23, 2019, from https://www.academon.com/cause-and-effect-essay/the-rise-in-gas-prices-153823/
"The Rise in Gas Prices" 12 February 2014. Web. 23 September. 2019. <https://www.academon.com/cause-and-effect-essay/the-rise-in-gas-prices-153823/>