Quote:
Originally Posted by Not Insane
Oil is a traded commodity, like stocks, gold and wheat. The price is driven by expectations for the future. You think it will go up, so you buy, driving up the price. You think it will go down, so you sell, driving down the price.
If a president said, "I'm a friend of oil and approve the keystone pipeline and am approving all these oil leases on federal land", even though that would not affect the supply for a while, the price internationally would immediately collapse. Conversely, if a president says "oil is bad and I want to make it harder to produce, and get people into electric cars", the price of oil would shoot up, even though his pending actions would have no direct effect on the supply for a while.
That's why gas was much cheaper under Trump and more expensive under Biden.
The one caveat is if supply and demand really does kick in. But that doesn't seem to be the problem right now. I'm not seeing any lines. At least, not yet.
I did just get my 250 gallon tank filled, not because I believe the price is necessarily going up but, more importantly, so I will have plenty of fuel if we do see lines again. And for our lifestyle, the heaviest user of that tank is my ZT mower, that uses 5 gallons a week to mow our lawn. i.e. it will last us a while.
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According to info from the
US Gov't EIA, supply is about on par with current demand, despite the protestations in Biden's recent letter to oil company CEO's. That leveling is a fairly recent development, however: late April or early May 2022. The data predicts a spike in demand during the summer, which is typical.