Why do gas prices fluctuate?
Retail gasoline prices fluctuate mainly because of crude oil prices and the level of supply relative to demand. Because of the strong and increasing demand for gasoline in the U.S. and throughout the world, there is a limited supply which increases the price of gas. Seasonal Demand Prices usually rise slightly in the spring and peak in late summer when people drive more and then drop in the winter. According to the EIA, good weather and vacations cause U.S. summer gasoline demand to average about 5% higher than the rest of the year, causing gas prices to increase by 10-20 cents from January to the end of summer. Price of Crude Crude oil prices are determined by worldwide supply and demand which is why as countries around the world develop rapidly, the demand for and price of gas increases rapidly. Natural disasters and Political conflicts in major oil producing regions such as Saudi Arabia, Iran and Iraq can also affect the price of gas. The Organization of Petroleum Exporting Countrie
