It’s economics 101: supply and demand. We know pressure on the supply side means higher prices to meet demand.
And that, according to Greg Haas of energy sector analysts Stratas Advisors, is one of the main reasons we’re all about to see the summer gasoline prices at their highest in four years. It’s a sign, he said, of a global economy that’s doing well.
If you’re remembering fondly the much lower gas prices from just a couple years ago, you might be interested in what changed.
The Organization of the Petroleum Exporting Countries (OPEC), made up of Saudi Arabia, Iran, Iraq, Kuwait and Venezuela, decided the market was flooded with too much supply, so they basically turned off the faucet. They let oil production fall, which cut supply. And meanwhile, demand went up worldwide.
Back in the 1970s, '80s or even the '90s, that might’ve been the whole story, but not today. Additionally, even though they’re not part of OPEC at all, this story still finds a way to include Russia.
