HC 434 First Individual Assignment

  1. During the entire month of June 2008, most consumers consistently paid $4.00+ for a gallon for gas. Media reports and anecdotal evidence suggest that gasoline consumption went down during this period. Well, let's verify this:

    Go get the real weekly gas consumption data . The data are weekly consumption listed in units of thousands of barrels (one barrel = 42 gallons).

  2. In class the professor has argued (and shown data) that the supply of oil available to the world is fixed at 85 million barrels of day. Find and report on evidence that either supports or refutes this claim. If the claim can not be refuted, then what does it mean when say Saudia Arabia announces that it will increase output to increase the world supply of oil?



  3. The image to the left shows the components that go into determining the price of gas - price of crude oil, taxes, refining costs, distribution and marketing (the last one represents the profits for the industry).

    Starting in the year 2000, research how these components are changing on a yearly basis and determine also if the profit margin (in terms of the percentage) is increasing with time.







  4. Based on the research you have done, write a short (500-600 word) essay on whether or not you think the price of gasoline at the pump is mostly driven by the standard market conditions of supply and demand. It will be very useful if you watch both parts of this CBS 60 Minutes report .