[GCFL-discuss] Gas Prices

[gcfl-discuss at gcfl.net]

Yolanda,
     Thank you for the latest e-mail.  I will be sure to fill up on the
19th.  If people are attacking an industry that truly has done nothing to
deserve it I try to support them.  The reason the prices are so high is not
because the "evil" oil companies are making money hand over fist.  It is
because of a number of factors that all basically boil down to the law of
supply and demand.  There are three main problems.  The first is that OPEC
has limited production (lower supply).  The second is that with all the
instability in the gulf people are afraid that oil might be harder to get
and therefore are hold onto it, but literally and in futures (increased
demand).  The third problem is that the US has not built a new oil refinery
since the mid 1970s.  Most refineries are running at peak performance and
are still having a hard time keeping up with demand.  (again lower supply).

      The other problem with nobody buying gas on the 19th is that people
are not going to drive less, they are just going to fill up on a different
day.  Consequently the demand is not going to do down overall.  However if
the oil companies truly do "choke on the supply" they will be forced to cut
production.  Therefore on May 20th when more people are filling up there
will not be as much gas available and there the price will go up.(increased
demand, lower supply).  So by making the Oil Companies "choke" you are in
fact costing yourself more money.

Eagle