There are an enormous amount of factors and combinations of factors that could explain the fluctuation of gas prices over the years. I learned a lot from the link posted. One thing I learned that I never really thought about before was how some regions of the United States see even more fluctuations than we do around here. A few reasons for this change among regions is that retail competition and operating costs play a role in prices, supply distributions and marketing cause a run-up in prices, distance from the supply, along with storage and distribution causes higher gas prices, and lastly, environmental programs add to the cost of production.

A contributing factor to gas price fluctuations has a lot to do with the prices of these resources and where we import it from. In 2009, the United States imported about 51% of petroleum. Over half of these imports came from the Western Hemisphere. Instability and war plays a role in why purchasing petroleum becomes more expensive. I was happy to learn from this link that our dependence on foreign oil is expected to decline in the next two decades.

Other factors such as expected future prices contributes to the fluctuation of gas prices. Currently, winter time demands a lot more petroleum. People are heating their homes with oil and filling their gas tanks, because who wants to walk to work/school in the winter? Not me! As soon as summer rolls around the price of gas is expected to fall, maybe not by a lot, but since the prices are high now, more gas is being provided. As the seasons change there will be a surplus of gas, therefore, the price will decrease for some time.

Natural events, such as severe weather, earthquakes, and hurricanes decrease productivity and decrease supply, in turn this increases the price. Hurricane Katrina of 2005 is a great example of this. The Gulf Coast contributed to about 10% of the nation’s oil supply, which was greatly disturbed due to the hurricane. As a result, oil and gas prices sky-rocketed. Luckily, there was no catastrophic damage done to the oil infrastructure and things were back under control within the next nine months in that region.