PRESIDENTS AND THE PRICE OF GASOLINE

The following is excerpted from CNBC (October 18, 2012):  https://www.cnbc.com/id/49461923.  You are encouraged to read the whole article.

Recent history seems to have borne out that view. Despite the recent Bush administration's strong support for the oil and gas industry, pump prices rose from a low of about $1.20 a gallon in late 2001 to a peak of $4 a gallon before crashing below $2 shortly before he left office in 2009. Shortly after Obama took office, prices began a steady climb and kept rising but remain just shy of that 2009 peak.
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U.S. energy policy has encouraged the exploration and production of crude oil, the biggest single variable in the pump price of gasoline, through tax subsidies that promote drilling. Those tax breaks, which were expanded during the Bush administration, have helped spur a boom in domestic production that has reversed a 20-year decline in U.S. 

U.S. demand for gasoline peaked in 2007 and has been declining steadily since then. Part of the reason, as Obama mentioned in Tuesday’s debate, is that the recession cut into demand for energy. But gasoline consumption is also falling because the cars and trucks are becoming more fuel-efficient. Obama cited his administration’s efforts to drive fuel efficiency standards higher.

As domestic demand has fallen, U.S. refiners have continued to squeeze more out of each barrel of oil. If the U.S. market were a closed system, the surplus gasoline would tend to drive down prices. But the system isn’t closed. With domestic demand falling and capacity inching higher, refiners have been exporting gasoline to overseas markets. Last year, the U.S. became a net exporter of gasoline and other refined products for the first time since 1949. (BOLDING MINE FOR EMPHASIS)

Meanwhile, the price of gasoline is FALLING!  Excerpted from CNBC (October 17, 2012).:  https://www.cnbc.com/id/49449346  Again I encourage you to read the whole article.

A dramatic spiral for gasoline prices in some key battleground states comes just three weeks before the U.S. presidential elections.

Ohio voters have watched prices at the gas pump drop by nearly 20 cents on average in the past week. At the same time, retail gas prices have plunged more than 10 cents in Wisconsin and Illinois.

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"I suspect that both candidates can guarantee $3 to $3.25 gal gasoline in Ohio after this week's gasoline debacle," said OPIS analyst Tom Kloza. "You will see some sharp retail drops in battleground states like Ohio, Pennsylvania, Florida, Wisconsin, and Nevada in the next few weeks."

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But while the notion that the government could somehow control gasoline prices is appealing, the reality is that the price you pay is set daily, sometimes hourly, by market forces around the world.

A series of U.S. refinery glitches and tight supplies in some regions caused gasoline prices to surge earlier this month to the highest prices since the spring. But the switch to a less expensive winter grade of gasoline, weak refinery demand and increase of supplies in certain areas caused gasoline prices to start coming down. An unexpected increase in U.S. gasoline supplies in the past week could cause pump prices to fall even further.