Question
will gas prices rise as of today or will the continue to fall?
I am 16 and trying to understand the economic issue. Since i love driving i am worried that if the stocks continue to rise gas will once rise to high prices again. I do not understand why OPEC cut back oil production. Does this mean they want prices to stay high? I also see that most gas companies(i.e. Shell, Exxon) have reported huge increases in revenue. Does this means they can keep the prices lower even if the economy rises?
1 year ago - 1 answers
Best Answer
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Over the long term the OPEC countries are going to increase oil prices by reducing production in order to create a scarcity of product and bidding wars. When it comes to oil prices OPEC calls the shots. As far as the oil companies are concerned their profit margins are typical of manufacturing organizations in general and are about 1/2 of the profit margins of the pharmaceutical industry. Their profits seem obscene due to the size of their operations, but on a percentage basis they are quite reasonable. If the price charged by OPEC goes back up and the oil companies can sell the same volume of gas they could reduce prices by about 5% without going broke. So next summer gas would sell for $3.80 a gallon instead of $4.00 a gallon. I don't think it makes much difference. Hope this helps Jerry-the-bookkeeper
1 year ago
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