The Concepts of Supply and Demand

Gasoline prices are influenced by a multitude of factors. Crude oil prices, the major component of gasoline, are higher. World oil supply is tight due to record growth in world oil demand. With gasoline demand at record levels, U.S. refineries have responded by producing record amounts of gasoline. Most refineries are running at a 96% utilization rate, far exceeding the general industry average of about 82% (Hackworth & Shore, 2004). There has been no net increase …

…McGraw Hill: Burr Ridge, IL. Hackworth, J. & Shore, J. (2004). Challenging times for making refinery capacity decisions. Energy Information Administration NPRA Annual Meeting. Retrieved on January 8, 2005 on the World Wide Web: http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2004/npra2004/npra2004_files/frame.htm Parker, J. (2004). Refiners in no rush to expand; Selling every drop they make now. Seattle Times. Retrieved on January 3, 2005 on the Proquest database: http://www.proquest.umi.com.