Don't know about Canada, but fellow US residents, notice that the prices for gas is going down? I know as we transition from summer to winter, prices drop but not this much. Usually, the prices for gas in the winter is $3.40 for regular (in my area of SoCal) but the prices are dipping to $3.30 or even $3.15 at the slightly less-developed areas. That's a HUGE FREAKING DEAL! But what are your thoughts on this? Some people are speculating that the decreasing prices are a telltale sign of deflation but others feel that this will not last very long.
Broadly speaking and rather obviously, it's because of an increase in production. This will adversely affect predominantly oil economies, Russia's for one. The problem is that the reduction in prices might harm a lot more people than petroleum's cheapness will benefit some. The fall in the price of oil really ruined the USSR's economy in the 80s, and the economy of the former USSR was not in a pretty state even after the reintroduction of capitalism, partly because the most important industry was so much less valuable than it had been, and assumptions of its continuation led governments to make unsustainable spending and then cuts to compensate. And, from an entirely uneducated train of thought which needn't be paid attention to, I think that cheap oil might encourage its frivolous use in some cases.
Personally I think it's an artificially-suppressed price due to a deal between oil companies and politicians. The incumbents want us to like them and the oil companies want politicians to favor them, so they can eat the cost of decreased gas prices to make the incumbents look good until the elections are over. Just my supposition. I can almost guarantee they will creep back up near $4 a gallon soon, so buy your fuel now!
The government confiscates large portions of refined gasoline and petroleum products through a period of a few years. During this time they are hoarding all of this stuff, the prices are high. If the government hoards too much over an extended period of time, the prices jump to an extremely high level. When the government has hoarded enough fuel and petroleum products, that is cannot hoard anymore, it sells out the surplus and the prices go WAY WAY down. There are many theories as to why the government does this, and they can all be found online. One of the theories is that the government DOES control the economy, and depending on who is in office (not that it matters WHO is actually in office), the government is either hoarding or selling off surplus. The government DOES control whether the nation is in a recession, depression, or has surplus of everything. Seeing as we ARE the USA and have so much surplus of everything here, the government plays with that to their advantage. It's called manipulation. But again, for what reasons, you have to decide for yourself.
I think for the U.S. it is all of the fracking efforts that are finally paying off. If we could have the Keystone pipeline built, we could sustain these prices for longer periods of time. Increased production lowers the cost; it is simple supply and demand.
Yeah, we've just had to destroy the lives of those living in Eastern Montana and North Dakota to get it - but hey, who cares about them...
Truth-- fracking and pipelines aren't the holy grail of energy. I'd prefer we get off of oil entirely, but that industry will throw its weight around until there is no more. :/
Falling gas prices are a result of increased exporting of our own oil and the waning dependence on internal combustion vehicles. The fact that we are producing more oil(Due to sanctions on Russia) and the recovering of the economy are the main reasons that we are seeing lower prices at the pump.
