Myth: Energy producers are engaged in price gouging and are taking advantage of the global environment for outrageous corporate profits.
Fact: These are terms you may have heard or seen floating around the comments sections of social media sites as a way to describe what local oil and gas producers are doing to “stick it” to consumers. The reality is, they are watching prices rise and fall like the rest of us.
Consider this…
Like most commodities, the fundamental driver of oil's price is supply and demand in the market.
Oil markets are composed of speculators who are betting on price moves, and hedgers who are limiting risk in the production or consumption of oil.
Oil supply is controlled somewhat by a cartel of oil-producing nations called OPEC.
Oil demand is driven by everything from gasoline for cars and airline travel to electrical generation.
So, next time you’re outraged at the prices you’re seeing at the pump, keep in mind that it’s not local producers who are setting those prices. To the contrary…they are working hard to increase local supply and make oil and gas both more affordable AND reliable.
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