How is the law of supply and demand failing? Demand for oil/gas is down and supply is up, yet price goes up?

The demand for gas and oil is general is down; there's less people driving because of the extremely high gas prices we had last year AND a lot more people are unemployed so they don't need to be driving since they aren't going to work.





Furthermore, the supply is up. The price for a barrel of oil is lower compared to last year (around $30~$40 per barrel) and OPEC is considering lowering the amount of barrels they put out since the supply is so high and demand is lower than previous years.





And yet the price for a gallon of gas has been increasing. In California, the price has gone up by at least 30 cents just this month. How can this be?





How can the law of supply of demand be failing like this? Could it be possible that oil companies are intentionally manipulating supply by purposefully choosing to refine less oil and price gouging consumers? Isn't this kind of profiteering illegal?





Are a lot of books going to need to be rewritten if the cornerstone of economy, the law of supply and demand is no longer valid?





Please explain.How is the law of supply and demand failing? Demand for oil/gas is down and supply is up, yet price goes up?
The last crises and cause for the cost of the oil prices to go up was not a Supply and Demand issue. It was an issue of speculators on Wall Street. This was an artificially induced price increase.





I think the current one is an attempt for oil companies to keep their profits high though i am sure demand has gone up some, you know you have an issue when a barrel of oil goes down and the price of gas goes up!





Oil is a commodity and as such it is too often manipulated by speculators. None of the spikes were caused by supply and demand, and yes we have an issue when that happens.





Perhaps it is time to regulate speculators, especially when they can create a crisis as large as the one we just had!How is the law of supply and demand failing? Demand for oil/gas is down and supply is up, yet price goes up?
Oil is controlled by OPEC, which is basically a monopoly with the ability to set the price to whatever they want.





The law of supply and demand only applies when the market is free and fractured enough that no one player can set the rules by himself.
Well actually oil companies always slow refining in the winter time.





That's when they shut down refinery's and do maintenance on them.
The price of gasoline hasn't made any sense for at least a year in any way shape or form. I heard tonight that it has something to do with the refineries.
They are slowing production to keep prices up
I was wondering the same thing. There's an article about it on MSNBC.com and it didnt make much sense to me...





http://www.msnbc.msn.com/id/29210445/
Oil and autos are a huge load of fat cats who carry half of Congress in there pockets. Demand, in this case, is forced.





We have the techology to drop the need for oil altogether....there is far too much profit in it.





Tesla lit an entire city using the current in the ground...





The electric car was squashed because there is way more money in combustible motors. Hybrids are a crock. We can do much better. Check out ';Who Killed the Electric Car?';
[The benchmark for crude oil prices is West Texas Intermediate, drilled exactly where you would imagine. That's the price, set at the New York Mercantile Exchange, that you see quoted on business channels and in the morning paper.]





[But it is the overseas crude that goes into most of the gas made in the United States. So prices at the pump will probably keep going up no matter what happens to the benchmark price of crude oil.]





(testicle's article)





Make sense I guess except why quote Texas oil if you are buying Saudi oil?
The oil companies are artificially altering the price of gasoline. The price per barrel has nothing to do with this since we are talking about gasoline, a refined product. As such, the companies are now operating at about 84% refining capacity, well below what is the norm even after a massive load of hurricanes. So, they are telling the public that they are shutting down a few refineries due to maintenance and upgrades. Truth is, they want this to happen as it raises gas prices. Also, wait to the shift in summer blends of fuels that start later in March. That means more refineries will experience down time.