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In this bibliographic essay you will find out the different types of researching skills I have came to learn

over the semester. The topic that I will be going over is about oil and gas prices and what are the causes and effects for them. In America we have a lot of connects and ties with other countries, I will be talking about how when foreign affairs plays a role in our oil and how they affect our gas prices. Also I will be going over the demand for oil and why the demand rises and declines. When gas prices rise, its not only our wallets that it affects but many other goods that we consume as well. It affects goods such as food prices, travel and spending limits. We as Americans are affected greatly every time a price will rise or fall, it changes our ways of buying certain items or traveling certain distances and sometimes it has no affect. Also in this essay I will be going over how other countries life styles differ from America, such as Europe living differently because every automobile or majority of their automobiles are more gas efficient such as they ride mopeds and different types of small cars ,having them not spend a high percentage of their income on gas. By statistics in certain parts of America some people dont let prices affect them in their everyday spending, no matter what the price Americans still need their goods and will still have to pay the cost no matter what. In my first reference Why Are Gasoline Prices high and rising? By Institute for Energy Research it starts out by giving us how high the gas prices have reached since last year. As of February 20, 2013 gasoline prices in the United States are averaging $3.78, which is 14 percent higher than January 2013. Some of the main components are that the price of oil is determined on world markets, the change in refining costs to transform oil into gasoline, and distribution and marketing costs that include the costs of the retailer who provides the gasoline at the pump. There plenty of reasons why gasoline prices rise but the largest component is the price of oil which makes up almost 70 percent of the price at the pump. As of now there are several

refineries that are down for maintenance or due to equipment failure. If we had lowered oil demand it would help lower oil prices but the United States can do anything about the demand of other countries nor increase the supply of oil from other countries. For the second main cost of price of gasoline is federal and state taxes, federal tax on gasoline is accounted for 18.4 cents per gallon. The 3rd major cost is refining costs, where crude oil is cracked and formulated into its chemical components and made into gasoline. Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. In December 2012, refinery costs compromised 8 percent of the retail price gasoline. With world oil demand growth outpacing oil supply output gasoline prices are going to be high and increase sporadically meaning increased oil prices and gas prices. World markets are going to be exasperated because the increase of U.S production and the decreasing of U.S consumption. Gasoline prices are going to be further boosted due to the lack of maintenance routines and equipment failures, there will be new environmental regulations which will have increased the cost of refining crude which will be passed onto consumers of oil products in the future. In the article How Gas Prices Are Affecting Consumers by Zunaira Zaki state that the average American household spends $3,348 of its after tax income on gasoline and diesel. About 10 cent rise in prices means that the average household spends $93.25 more on gas and diesel per year and every 10 cent rise in gas prices removes $11 billion from consumers wallets over the course of a year. People who are most sensitive to fluctuation in energy prices are the lowerincome households. Lowest income households quintile spends about 11 percent of their income on energy which includes gasoline, natural gas and electricity. When oil prices rise to ridiculous amounts it normally affect us American especially our pockets. But do to experts and economists

they believe rising gas prices dont actually affect Americans behavior. According to economists Lutz Kilian at the University of Michigan wondered that high gas prices have to be forcing Americans to cut back on other spending but found out that there is no significant effect on the consumption of movies, bowling etc. meaning because of the high rising gas prices the other goods you cut back on there is no cut back. So Americans may have high criticisms of protesting loudly about the price of oil but there spending says otherwise, whereas Europe as a whole different outlook on it. Because of the Europe taxes keeping the gas prices well above $5 dollars you see a lot of more gas efficient automobiles such as tiny cars and mopeds. What are these prices doing to other Americans? Well most Americans can list specific ways in which how gasoline has affected their lives but heres a couple of things that affect them mostly. Most Americans by the Gallup.com polls cannot afford the cost of driving or commuting. They have to limit their travels and cutback on vacations, have little or no disposable income basically eating into their budget. More Americans say because of gas prices they stay home more or dont go out as much as they used to. Driving less also plays a factor because any or every rise in gasoline prices is hurting them financially, having these financial problems just get added up in other categories such as spending more on food because when gasoline prices rise that means food prices will rise as well. Just by prices increasing a little more make Americans not visit their own families sometimes because not only canceling family visits or vacations hurt but it cuts into business profits giving you less money to save. So now families revert to using the public transportation or car pooling which are great ideas to save on gas but it hurts morally that you have to use other options to get places because gas prices make you do that.

Not only Americans are affected by gasoline prices but there are many other outside problems going on because of gasoline. According to Rick Newman article 5 things that change when gas prices spike Consumer spending falls. A 20 percent increase in gas prices which is about what this year so far has been, spending on other things needs to fall by about 1 percent. Some shoppers cut back on a lot of other things particularly smaller things such as little snacks or drinks they buy. For the most part people put off big purchases like appliances or a new car, shoppers look more for gas efficient cars instead going out buying a brand new Tahoe or expedition. Since 2008 Car companies have learned their lesson and started to make more small cars that can compete with the best from Japan and Europe. Because of the economy this hurt a lot of workers as well, automakers are spending less. Meaning automakers cut back on their own spending and have to lay off some of their workers putting people out of jobs at most inconvenient times. Consumers do adjust though; by keeping their confidence buoyant consumers must have a change in their behavior. Americans are still adjusting to the prices of 2008; you will now see in America more gas efficient cars typically small cars and a lot more car pooling. According to CNN Money they feel falling gas prices could boost the economy. On February 27th of 2013 gas prices were almost at 4 dollars really being at 3.79 but on April 19th of the same year prices dropped to 3.52. With gas prices dropping to 30 cents a gallon the reason for this mainly due to declining oil prices. If gas price drops continue which many experts believe it will, prices could slip somewhere below 3.40 a gallon. When gas prices drop that mean the economy is working real well, economist love this site because that means the first quarter growth with be relatively strong. There is good news about these new gasoline prices , according to a article by Brad Tuttle Gas Prices are about to hit new lows things are looking up

for Americans an how much they will spend on gas. Because of hurricane season a year ago gasoline prices were shooting through the roof putting negative effect on every American pocket. This year things are a little different, with prices remaining subdued even with these problems were having with the Middle Eastern countries, the national average for a gallon of regular at the end of September was at $3.42 which is already 40 cents cheaper than a year ago. Do to experts and other economists gas prices could drop another 25 cents or 30 cents per gallon making it the cheapest averages of the year. AAA spokesman Avery Ash said averages in as many as five to 10 states could drop below $3 dollars per gallon (right now in Ottawa Kansas gas is averaging $2.99!) Nationally regular gasoline averages $3.47 a gallon which is 47 cents down from April. Middle East tensions and oil refinery have crimped supplies a bit but not as much as what it has been. With production up oil inventories at 21 year highs and tepid consumer demand, gas prices have fallen for 11 weeks and are expected to drop more later this fall. Gary Strauss of U.S today news says motorists in some regions are already paying less than $3 a gallon. In South Carolina where average price is a U.S low of $3.06, nearly 30% of service stations are selling gas below $3. Today gas prices dont know what they want to do rising and jumping up 20 cents or staying low decreasing below $3. Local gasoline prices are swinging up and down every week, the city of Decatur; Illinois has seen earlier this year a 24 cent increase and in Superior, Wisconsin has seen a 28 cent increase. Refineries are trying to keep stocks of gasoline low to save money but with 143 operating refineries if just one has some type of problem such as equipment failure or even maintenance problems, supplies quickly drop. With prices having small whiplashes damage the economy more than a slow rise in prices because they undermine consumer confidence economist say. According to USA TODAY Jonathan Fahey , AP

business writer wrote that drivers may be pleasantly be surprised when prices slide lower, like they have recently , the national average is at $3.28 , its lower level of the year. The bad news is they never know when the price might bounce back up , and increases are almost always sharper than decreases. Another statistic by USA TODAY but in a different article AAA has recorded an interesting stat. for the 1000th consecutive day gas prices will be averaging over 3 dollars per gallon. There many problems in world of gasoline that can be scrutinized and criticized but there are also hidden causes that are not brought to discussion. One hidden cause according to COMMODITY HQ in their article THE HIDDEN CAUSE OF RISING GAS PRICES they have featured that there is an Ethanol Impact. Ethanol has been one of the main culprits behind the higher cost of filling your tank. in 2005 there was a clean air act which meant you can only blend a certain amount of ethanol in the gasoline being produced, but by law the amount of ethanol used will steadily increase as time goes on. The price of ethanol has been swinging back and forth; with these swings it puts major pressure on gasoline prices. There is also such a thing called a blend wall which is that the amount of ethanol that has been steadily rising, rising up to 10% and there is a vast majority of cars that cant handle that much ethanol in their cars. By 2015 experts believe refiners will use up to 15% of ethanol , with that being said about 95% of cars on the road currently today cannot handle any of it. Meaning there will be a rise in car producing, a producing many more gas efficient cars or producing cars that can at least handle that much ethanol. Praying to the gasoline gods sometimes doesnt always help your situation when it comes to getting prices down for gas. But reading an article from KCBD.com titled 14 ways you can deal with rising gas prices have listed a couple ways you can handle situations. Firstly always

try to find the best deals and not the quickest deals. One gas station might be $3.31 but if you have to drive a little further for another station thats at $3.29 then economists suggest you make that little extra drive and get that 2 cent cheaper gas. Another suggestion is keeping your car in shape. An out of tune engine , poor alignment or underinflated tires can cost you up to 2mpg, says the American petroleum institute but this also goes for safety issues as well. Slowing down also helps a little, each 5mph over 60, the EPA says is like adding a dime to the cost of a gallon of gas. Avoid quick starts or a lot of passing, slow and steady wins the race. In an article written by Pete Sepp how Obama can deal with rising gas prices he states if president Obama were to come forward with a strong commitment to increase U.S oil production by carefully permitting development in selected offshore and Alaskan areas, our nation could make more progress toward becoming a price leader rather than a price follower. Gas will always play a factor or role in the American economy; whether it increases or decreases it will always have a positive or negative effect on us. Its how we as Americans adapt to the situation to live our life better financially. When prices rise we cant do nothing about it but buy it. We must eliminate all other negative effects of gas to not be so much bothered by it, the government, politics, and economist can only do or say so much about gasoline or oil they just give us facts. It will help us out more as American if we go ahead and invest in smaller cars and car pooling etc. truth is there are still ways to live a good financial life when gas prices rise, though it may be tough there are still ways around it.