Why are our gas prices at a gas station tied to the speculative stock market? When did that happen and why?
This is a great question, especially in light of current circumstances here in the U.S. Gasoline consumption is down; at the same time, gasoline production in the U.S. is reaching record levels. Classical economics tells us gas prices should be falling. However, with gas prices at the pump reaching $4 per gallon and presidential candidates spouting all sorts of nonsense, who knows what to believe?
Mr. Econ decided to call on a long-time friend and expert in this field to help him answer this question. Dr. Cyrus Bina of the University of Minnesota-Morris is a recognized expert on the economics and geo-politics of oil, and is the author of “The Economics of the Oil Crisis, and most recently, “Oil: A Time Machine—Journey Beyond Fanciful Economics and Frightful Politics.” Dr. Bina has helped us all understand this very intricate subject. However, Mr. Econ takes full responsibility for his answers.