Factors that Affect Gas Prices
If you’re like us at Avondale Nissan, you’ve probably spent a good amount of time enjoying the extra money you’ve saved at the gas pump these last few months. It has been nice, hasn’t it? However, it isn’t likely to last forever, due to the simple volatility of the crude oil market. So, ever wonder what factors affect gas prices? Here are four of the most basic ones to pay attention to.
1) The “Summer Blend.” Most of us haven’t heard of the “summer blend,” but here’s what it is: during the summer months, a cleaner-burning form of fuel is sold, one which is less likely to form smog and pollution during the hot summer months. However, there’s a caveat: this cleaner fuel costs between 10 and 15 cents more per gallon.
2) Crude Oil Demand. The crude oil market has taken a remarkable plummet in recent months, with many factors responsible. North America is producing much more crude than in recent years, while Asian markets aren’t importing nearly as much as expected. This has created a lower demand, and lower fuel prices are the result.
3) The Weather. A common factor in fuel demand is the simple fact that, in colder areas, drivers travel less frequently than during summer months, which causes a dip in demand. However, when there is a catastrophic weather event, such as Hurricane Katrina, this diminishes production, which causes demand to spike. The weather, as we all know, has a mind of its own.
4) Where do you Live? Geography doesn’t usually get enough credit for manipulating fuel prices, but that doesn’t mean that it doesn’t factor in. A great example of this is Hawaii. Because of its remote location, Hawaii has to have virtually everything but pineapple shipped there, and this causes gas to be extremely expensive. Additionally, some areas such as North Carolina just have a higher fuel tax, which is reflected at the pump.
So there you have it, folks. There are many factors that you might not consider when you’re looking at fuel prices, but if there’s anything we know for sure, these low prices won’t last forever. Fortunately, we’ve got some of the most fuel efficient cars on the market available right here at Avondale Nissan. Schedule your test drive today!
