Gas Prices

This morning, Mark was staring at his computer screen and asking me where certain streets were in relation to our house.  Why was he doing this?  He was looking up the best prices on gas in our area before heading out to fill up the tank.  I told him I thought the station just down the block from us was as cheap as the places listed on the site.  So he went to get gas, and I headed out to a computer class I have been taking at the library this week.  I called him on my cell phone when I passed our neighborhood station to tell him the price there was a penny lower than those on the web site.

I went to my class.  An hour and a half later when I was on my way home, I drove past several gas stations.  The prices were the same at most, but then I saw one for $.26 cents more than it was earlier.  I drove further down the road and saw at one station the price raised, and at the station across the road, there was a line 10 cars long waiting to get gas at the morning’s lower price.  Thankfully, when I arrived at the intersection near our house, the price at our neighborhood station was still low.  I quickly pulled in and filled up.  Mark just left for an appointment about an hour ago.  He called to tell me the price at our station had just been raised by $.26

The news reporters have been forecasting a price increase because of Hurricane Gustav that is expected to hit the Gulf this weekend.  I thought the prices would be in a holding pattern until we saw where Gustav lands.  So I am guessing that this has to do with an expected demand increase as people get ready to travel for the holiday weekend.   I would really like to understand how gas prices really work.  I know supply and demand has a lot to do with it, but it seems there is more to it than that when it can increase so much in a short period of time.

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