Macroeconomic analysis of oil and gas prices in news media

Oil and Gas Prices:

Gas prices have been one of the major issues or problems in the past few years, especially in the United States where more people are hitting the road drive. As the driving season begins in the summer, many Americans continue to look at gasoline price at the pump. In the past few months, many drivers have been wondering why they have to pay more at the pump in light of the spiking prices in various parts across the country. In his article on CNBC, John W. Schoen examines why most drivers may be right in thinking that someone may be rigging the market because of the prices spike throughout the country (Schoen, 2013).

While gasoline prices have been a major problem in the recent past, the tendency of these costs to be different from one place to another raises huge concerns. These concerns continue to emerge despite of people understanding that there are various stakeholders in this industry such as refinery companies. Even though gasoline is a major issue throughout the world, prices spike suggest that the different market players are involved in the prices spike. Actually, the price of gasoline is currently influenced by the region an individual is making the purchase in addition to other market factors.

The main factors contributing to this problem is the refining capacity in a specific region as well as the costs of transportation to get the fuel to drivers in need and the state gasoline taxes. From a supply and demand perspective, price spike in gasoline are attributed to product and service supply and demand. While the demand for the product continues to increase because of increase in the number of drivers, the prices of the commodity are mainly influenced by the supply and demand factors within the particular region. There are concerns on whether lower demand caused by the fact that cars are becoming more fuel efficient should lessen the prices. This trend does not result in reduced prices because U.S. refiners continue to export gasoline and diesel fuel to other parts of the world with more demand such as South and Central America. Despite of these issues, many drivers still think that prices spike is caused by manipulation from industry players.

An article in by Bloomberg Businessweek provides a different perspective regarding high gasoline prices despite of the abundance of oil. In their analysis, despite of the increased production of oil by the United States, the benefits of these measures are yet to be realized at the gas station. Gasoline prices are still high despite of decrease in fuel consumption and the belief that higher supplies and lesser demand should lead to cheaper prices. The authors conclude that supply and demand forces that should result in reduced prices are not working effectively because of the outdated regulatory and transportation systems (Loder, Parker & Philips, 2013). Consequently, oil boom in U.S. production has not been enough to lessen gasoline prices though America's appetite for this product continues to rise.

These two news articles seem to conclude that gasoline prices are mainly influenced by the existing supply and regulatory systems. Therefore, the United States experiences huge economic fluctuations and uncertain gasoline prices since American refiners are finding it more beneficial to sell oil-related products such as gasoline and diesel overseas. Actually, the country exports over 3 million barrels of oil-refined products on a daily basis to countries like Mexico and Venezuela. The huge exports continue to hurt the country's economy while American drivers continue to experience huge price disparities.