re: Gas prices compared between Obama and Biden

quote:

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OK, I'll take your bait. August of 2008 was the start of the great recession. Gas prices started to plummet due to no demand for oil.

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Except that oil prices began to plummet before August and continued to do so despite Supply dropping and Demand rising.

LINK



The dark vertical line is Monday, July 7, 2008, the date Bush removed the administration's restrictions. Oil took a dip immediately, had a small spike over the following weekend but by Tuesday, July 15, 2008 it began to freefall for ~5 months.

We also see a similar thing when Congress allowed their moratorium expire.



The price of oil began rebounding the week before Congress allowed their moratorium to expire. Both the House and Senate were Democrat-controlled so there was much speculation that they would not allow this to happen. As is normally the case, word leaked out a little ahead of time that the Democrats wouldn't be blocking the expiration so we see the drop on Monday, September 30, 2008 just a day before the expiration happened on October 1.

For the Recession to cause the price drop, it would have to be a Supply/Demand issue. We can see it wasn't by looking at monthly oil production, monthly gasoline sales (by gallons) and gasoline price (which roughly mirrors the movement of oil posted above).

2008
Thousands of Gallons Per Day Sold - Thousands of Barrels Per Day Produced - National Average Price
JAN - 53,994.1..........................................JAN - 5,115...........................................................$3.095
FEB - 56,157.4..........................................FEB - 5,148...........................................................$3.078
MAR - 55,494.8..........................................MAR - 5,189...........................................................$3.293
APR - 56,307.4..........................................APR - 5,180...........................................................$3.507
MAY - 56,390.6..........................................MAY - 5,143...........................................................$3.815
JUN - 55,938.5..........................................JUN - 5,138...........................................................$4.105
JUL - 54,802.5..........................................JUL - 5,177...........................................................$4.114
AUG - 55,628.2..........................................AUG - 5,003...........................................................$3.833
SEP - 53,405.9..........................................SEP - 3,974...........................................................$3.756
OCT - 55,210.7..........................................OCT - 4,738...........................................................$3.112
NOV - 54,080.6..........................................NOV - 5,078...........................................................$2.208
DEC - 53,931.5..........................................DEC - 5,103...........................................................$1.745

Consumption goes down in June and July yet Supply remains steady, meaning we should have been seeing Price drop in June, yet it didn't begin dropping until July. Specifically, sometime during the second week in July.

National Average Gasoline Price Per Gallon Per Week
(Week Ending Date / Price per gallon)
07/07/2008 - $4.114
07/14/2008 - $4.113
07/21/2008 - $4.064
07/28/2008 - $3.955

As we can see, prices were continuing to rise despite ups and downs in either Supply or Demand, but it wasn't until Bush removed the administration's restrictions that Price started to come down. This was such an important factor that prices continued to drop despite and increase in Demand and a drop in Supply in August then the Supply drop far outpacing the Demand drop in September (ie: around the time the Recession began). As well, Demand for October was back near June/July numbers with Supply far lower yet Price had dropped by ~25%.

The Recession helped, but the process was already under way by the time the Recession got rolling but the process started just after Bush removed the administration's restrictions and the data shows this.