Simple economics, oil price rises = gas price rises
Re J.W. Kane's letter Monday on gas prices:
The writer was complaining about the price of gas increasing and insinuating that someone was cheating.
Mr. Kane, the price of gasoline has increased because the the price of oil has increased. It was $29.20 per barrel Feb. 11 and closed Tuesday at $41.45 per barrel. That difference of $12.25 per barrel is equivalent to 29 cents per gallon because there are 42 gallons per barrel.
The price of gasoline was about $1.59 per gallon and is now about $1.69 so I guess we still have some more to go because gas has only increased 10 cents per gallon.
Mr. Kane might wonder why oil increased and the answer to that is because Russia and some OPEC countries were talking about reducing their oil output to reduce the excess oil in the market, which was caused by the world economies faltering, especially China's. That excess pumping caused the price of oil to fall $70 a barrel, which is $1.67 a gallon.
Dick Reuss, Myrtle Beach
This story was originally published March 24, 2016 at 9:52 PM with the headline "Simple economics, oil price rises = gas price rises."