Gasoline comes from a product called crude oil, also called petroleum, which is drilled directly out of the ground. Different companies buy these barrels of oil and then have to refine them, which means that there is a breaking down process that the oil actually goes through and additives have to be added to it to make it the actual gasoline that we use in our vehicles. Where does the United States get our oil? Well most of our oil imported from what is known as OPEC (Organization of the Petroleum Exporting Countries). OPEC consists of the participation of 11 different countries: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, S

From looking at the breakdown in gasoline prices, and determining that crude oil is the biggest part of the price, we can assume that when the supply of the world’s crude oil tightens and lowers its inventories that the prices will increase. Which is exactly what is happening according to an April 1, 2004 Article in USA Today. It states, “The Energy Department warned Wednesday that record-high gasoline prices likely are headed higher,” because “OPEC oil cartel announced it will cut production. OPEC voted to cut output by 4 percent a day starting today (4/1/04).”

After seeing how much oil the United States actually imports you might be a little shocked with this next statement. The United States is the world’s second largest producer of oil; the largest producing state is Texas. Most domestic oil is sent directly to refineries, but because of our dependence on foreign countries for oil, and the lesson we learned with the oil embargo of 1973 and 1974 the Federal Government set up the SPR (U.S. Strategic Petroleum Reserve). The U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned emergency crude oil in the world. SPR provides the President with a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy. It also allows the United States to meet part of its International Energy Agency obligation to maintain emergency oil stocks, and it provides a national defense fuel reserve. As of April 6, 2004 the inventory was at 652.1 million barrels of oil, which is approximately a 60-day supply for the United States. The storage sites are located in underground salt cavern along the Gulf of Mexico. The Gulf of Mexico was picked because it provides the most flexible means for connecting to the Nation's commercial oil transport network.

President Bush and presidential candidate John Kerry are currently debating over what to do about the rising gas prices. There are accusations about Bush wanting the prices to rise so the profits can continue to roll in. There are also accusations that just pretty much say Kerry doesn’t know what he is talking about, they are even

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