Gas prices are arguably the biggest concern of every American, especially motorists. According to the National Association of Convenience Stores, about 65 percent of consumers in the U.S. buy fuel from convenience stores and gas stations based on posted prices. Consequently, any gas station in town that claims to sell gas at $4.00 a gallon can expect to dry up pretty fast.
However, not many people are mindful of the factors that affect gas prices in the U.S. For one thing, the Organization of Petroleum Exporting Countries or OPEC plays a big role since they control much of the world’s oil and also determine the oil production quota of member states. OPEC, in turn, is influenced by the economies of other countries. If, for example, a country ramps up production in its manufacturing industry, OPEC needs to shore up its supply of oil to that country and keep up with the demand, thereby increasing gas prices across the board.
Geopolitical events also have a huge impact since any threat of tension, disaster, or instability in an oil-producing state will scare away oil investors. The same can also be said about state laws, like California’s clean-gas laws, since compliance with these new regulations usually entails higher production costs for oil companies.