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Saturday, September 6, 2008

Amateur Economics with Oil Prices

Because my day is generally pretty slow, I like to follow the economy via Yahoo Finance. The most common thing I like to follow is the price of crude oil, because damn it, I'm getting tired of gas prices, so I decided to do a little bit of math here to figure when gas prices will get down into range, ladies and gents, Amateur Economics:

(Disclaimer: My history with Economics is the course I took to graduate High School and then a Macro-Economic Principles class I took my second semester of college, so really, don't debate using the information you see here)

So without further adieu, here goes nothing:

Date Price of Oil Price of Gas Percentage
4-Sep 75 2.94 3.920%
1-Jan 100 3.3 3.300%
10-Mar 110 3.33 3.027%
5-May 120 3.8 3.167%
25-May 130 4.15 3.192%
3-Jul 147 4.39 2.986%
20-Jul 130 4.24 3.262%
10-Aug 120 4.09 3.408%
1-Sep 110 3.8 3.455%
5-Sep 106 3.78 3.566%

From this math, I've concluded that the price of gas is usually around 3% the price of oil. The scary thing is the fact that the lower the price of oil is, there more the gas costs per $, when gas was at it's highest in July, it only made up of 2.9% the price of oil, but when gas gets lower it's more case in point Sep 2007, it made up just shy of 4% the cost of oil. Sure, there are plenty of extenuating circumstances that make this up, but it's something to watch. People are so pleased to see the price of gas go down, they may not realize that its actually THEN and not BEFORE, the oil companies are taking advantage of us. Imagine if it's always a flat 3%, never up, never down, the price of gas could be at 3.18 right now with $106 oil.