Ron Amundson’s Political Blog

I was taking a look at the week in petroleum this evening, and its pretty amazing. I pulled a few of the graphs to see how supply and deman influenced prices, or not.

The greatest demand was in July-Aug 2007

Demand at the peak of US gasoline prices in 2008 was the same as in Jun and Oct 2007, yet prices were much lower at that time. The largest correlation seems not to be so much demand, as it is a dependence upon gasoline stocks. Of course… if one looks at the midwest and Rocky Mountain sitation, where gasoline stocks dont change a great deal, but the prices do, things dont add up very well.

Althought I dont have the graph here, its interesting to note the variation in oil days of supply. That too has some correlation, albeit it does not compute when one looks at a year to year basis.

Sure seems to me that speculation is the key factor in retail gasoline prices, much more so than supply and demand. Granted, if supply took a real header, it would affect the prices, just as if demand changed substantially.