Hey, remember when we were so traumatized when gasoline hit $2 per gallon? (I can remember being traumatized when it hit $1. I still am! When I was in college, a gallon of gasoline cost 21.9 pennies.) There wasn’t much outcry when it passed the $3 mark. But what about $4?
Economists are rather mystified as to why it costs so much. See Oil Price Defies Easy Calculation. The supply is plentiful, and there seems to be no artificial interruptions in the marketplace. One culprit seems to be that big investors, such as pension funds, are moving out of those shaky financial credit funds into commodities, bidding the price up. Also, the price has to be whatever the market can get, and few people seem to be inhibited by these high prices to reduce the demand.
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