Oil closes in on $75 as the U.S. dollar weakens further; Retail prices up

Oil closes in on $75 as the U.S dollar weakens further; Retail prices up
http://ca.news.yahoo.com/s/capress/091013/business/oil_prices


Summary:
The slightly risen gas prices in U.S last week was because the weakening of U.S. dollar. The gasoline price had been rised by two cents to US$2.489 per gallon. Gasoline prices in Midwest rose especially quick, but the price of gasoline was still so low. In Canada the average gasoline price is 95.9 cents per litre. Because of the increasing gasoline price, consumers will begin to weighing what they need more for their daily life, for example they will choose between the colder weather or the higher gasoline price in winter. Also, the Refiner are going to take facilities off line, which means they will produce less fuel since less people will be using it.


Connection:
This article linked with Chapter 2 the Operation of a Market. They link because this article is about the commodities market. while the exchange rate for U.S dollar is droping, the price of gasoline will start to increase. This article also link with the demand & supply factor and inelastic & elasticity. When the price of gasoline increases up to a certain price, the demand of gasoline will decrease, then gasoline will become an elastic product. At the same time, the supply of gasoline will decrease in slower motion and will eventually reach equilibrium again.


The connection between this article and Chapter 2 is because gasoline is a necessity which help us operate many of the machines that use in our daily lives so there will alwasy be a constant demand for them. Also, the article told us that the gasoline price will become higher in the world market. It mentioned in the article that the refiner will start to make less fuel since the price going up, which means the total demand of gasoline will start to decrease, which related to one section of this chapter " change in demand".


Reflections:
After i read this article, i think that since the oil price is increasing, more people will take buses instead of driving cars, especially we are still facing the economic depression problem, less cars means there will be less pollutions then before, which will increase the living condition of our enviroment. In the other hand, the demand of gasoline for home use car will decrease but the demand of gasoline for public transit will increase, but the total demand of gasoline will decrease. At that time, the gasoline price will decrease to attract people to use more.