AAA Today

[#1]

Gasoline prices follow consistent seasonal patterns.  Every spring they go up, every summer they reach a peak, and just about every autumn they come back down…

What sometimes pushes the extremes of this price cycle are things you might expect, like supply & demand.  But, another factor you may not expect is even greater than basic supply & demand principles… it’s speculative investment by people who have no intention of ever taking receipt of a single barrel of crude oil.  “Speculators do not produce or use the commodity, but they risk their own capital trading futures in that commodity in hopes of making a profit on price changes.” That’s how the Commodity Futures Trading Commission defines it.

In a June 2006 staff report by the U.S. Senate Committee on Homeland Security and Governmental Affairs (The Role of Market Speculation in Rising Oil and Gas Prices: A Need to Put the Cop Back on the Beat) such oil speculation can add $20 to $25 per barrel to the price of oil.  At the pump that’s estimated to represent an additional 50 to 60 cents per gallon. 

Here’s a link to the complete report.

In July 2008, speculation pushed crude oil prices to a record price of $147 per barrel, and gasoline to its highest national average of $4.11 per gallon. 

Where do we go from here?  Please share your thoughts. 

[#2]

I think it's incredible that the price of gas can be related to this speculation, and not just demand or shortages due to hurricanes and such. It's too bad that we're essentially at the mercy of these speculators. Thank you for enlightening me.

[#3]

Hi Gregg, where do I find the cheapest gas prices in Tampa, FL?

[#4]

You can check out fuel prices nationwide at Fuel Gauge Report.com which also includes averages for both state and metropolitan areas (like Tampa Bay). 

For specific information near you, the AAA TripTik Travel Planner lists many gas stations with fuel prices. You can access the TripTik Travel Planner here. There is also an app for your iPhone.