Breakdown of gas prices | Supply, demand, and market equilibrium | Microeconomics | Khan Academy
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- Опубліковано 12 бер 2012
- Where the dollars at the pump go
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You need to make a video about what actually sets the price of oil. Like, how speculators and wars and inflation affect oil prices. That is what people really want to know!
Id like to hear his take on OPEC having tensions with both NATO AND russia while controling 40% of the worlds oil supply right now...
11:32 4 dollars minus the 3.85 that takes in all of this other crap.
There was no explanation about supply demand and market equilibrium. The whole video was about just the breakdown of gas price. I think the title of video needs to be corrected.
There's gotta be more too it though.... What about subsidies? Speculators? Khan, could you do a follow up to this video that explores some of the other things that can impact gas prices?
@KjenkinsJC that is not true. Retailers' margins are much more a function of price movements than absolute price (and seldom get beyond .15 or .20). Refiners also can make very little margin with high oil prices and vice versa (dependent on the utilization of refineries). When oil prices are high, the oil producers are the ones that make the killing (and they get killed if prices drop to very low levels)
wow, I never knew this stuff, economics class took me here, thx
You should do a video that explores the relationship between the price of crude in gold (which I hear it is pegged to) verses the dollar. The fiat dollar is not what it used to be, and it is only going to get worse. In terms of gold, oil producers are selling far below their average market value.
Ron Paul 2012!
cont..
The idea behind is to get the market moving in a certain direction so the initial large investors can move out with a profit when they see fit.
And he didn't mention the president once. Good job sir
So how does it work if the the same company owns the rig, the tanker, the refinary and the gas station?
"so the current price of oil, and i kind of rigged the numbers." hahaha
I love this guy's voice, and, as a straight guy, I don't say that too often.
11:35 "All of these other cra....costs." That was funny. Not punny, but real funny.
Thanks, great video! But he didn't say how do the mining company (rig) set the prices?
I just learned today at an FEA conference that Bill Gates funds Khan Academy. I love you Khan Academy.
Sooo true!!!
EVERYBODY gets so worked up, but can be so wasteful.
I can find the relationship between oil and gas prices all over the internet. How come nobody has superimposed gasoline production, gallons of gasoline used, and the price of gasoline all on one chart?
Thanks Sal for the Video ! On your next Gas Prices video, could you explain the Oil Speculation and how they cause the price to be higher than it should be or even if that is what happens ?
Hope to see more Videos !
I was reading that US government gives subsidies to keep gas prices stable.
I agree Gerard.
Today I was like I'm going to watch all of Khan's videos today, but then I saw there are >3000 of them :o
yes. that is true
I second the comment about the oil speculators. Where do they figure in? The rest of this is just stupidly obvious. Watching this makes me feel like I'm either in pre-school or in the movie Idiocracy.
What about speculation and how it affects the price of oil?
can u do a vid on student loans?
@stalwartman I got your email; I got it off of several consumer report websites. That's what I was saying about taxes, though; look at Sweden and Belgium. Canada is quite beautiful, though! While the Middle East isn't the only source, my original comment was simply leaning to those who post pictures of gas pumps at low prices, write something like "Remember these days?" and use it to sway the ignorant to their political viewpoint. Cheers; Glad to have a conversation on here without profanity.
@khanacademy Perhaps I am missing something. If companies like Chevron don't benefit by rising gas prices, why is it that their profits will probably jump by $10B with this recent spike? Just track profits to crude price over the last 10 years and you will see. This is in spite of demand being down.
@RningRiot maybe a significant factor in why oil prices were so low in January 2009 was because it was the peak of the great recession and industrial production had declined precipitously? I'm just tossing it out there, I might be wrong though; what's your take?
What about oil speculators? I've heard on the news that oil speculators have been driving up the costs artificially. Is that true? Can we see a video on that, please?
Whay about the value of the dollar and how we inport and export gas which flucuates the price??
What you mentioned is better described as market making. It is a way of controlling markets. It can be done in several ways:
- media storms fabricating hypes. (or pretending nothing is wrong with the markets till the very end.
- Large investor recommendations. Basically getting investor advisers (tv hosts, magazines, etc) to make recommendations for smaller individual investor's to follow.
- Large investors will cause a price movement in markets by dumping or buying excessive shares.
cont..
If Alaska has so much oil and has one of the lowest gas tax, why are their gas prices so high???
supply-demand
Emerging market demand for oil would limit how much we can do to bring oil prices down.
i like how one of the tags is crack
some of it is used to make asphalt
...woah
Bubbles did this with Ricky’s honey oil
The problem many complain about "INCREASED OIL COMPANY PROFITS" is clearly explained here and can be controlled through legislation.
If congress would require the oil companies to adjust their profits requireing them to take into consideration the somewhat static nature of demand plus inflation we would have a much leaner profit piscture for the oil companies. As thing are now these factors are not weighed when crude increases in price and the oil conpany profits can rise sharpely.
@stalwartman It is actually around 18%, however that's paid to private corporations, not their government (granted the corporations pay more in taxes, as well as subsidize (somewhat) those programs privately; or so I will assume). Also if that were the case then why do prices increase based on the Middle East? Look at Iran and the Straight of Hormuz, Syria, Libya, etc... Just saying. It's no domestic as we don't import gasoline; we import oil.
why did khanacademy even presume that KjenkinsJC was even talking about retailers; since KjenkinsJC never even insinuated retailers, let alone directly referred to them.
khanacademy used that terminology ("retailers") in a highly presumptive manner; KjenkinsJC mentioned only Oil Company/Companies.
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@ontheotherhandx6 It's very expensive and inefficient, we won't be using them until we've improved them enough for it to be widely used to create a large amount of energy.
DO THE OIL BARREL ROLL
The plant get's 3% margin and we complain? SERIOUSLY?
Will take you around 34 full days of watching :)
@KjenkinsJC he said that the producers are the guys that make money off high prices, that's what chevron does.
@GerardFreeman Joking, right? As it is, now, those willing to do without gas are already keeping the price down, and anyone can ride the bus who wants to. How is your proposal any different? What's the point of $2 gas if you don't buy it?
Everyone maintains their "margin percent" throughout the distribution channel. As an oil company, would you rather make 15% on $2.00 or $4.00??? Obviously, the higher the price the greater the dollar margin. Oil companies say they only raise the price of gas in response to supply. This is true but they have no incentive to have lower prices because they maintain their margin. Therefore, higher prices = higher profits because demand is not very elastic.
so you are saying that the refinery take about $ 3.25 PG, what about the transportation from the wells and the rig it self ?????
Then, of those 50 cents per gallon of taxes, we give the oil companies ?how many? cents per gallon in stipends to ensure that they keep producting?
So Newt Gingrich's $2.50 gas promise if elected for president is bogus or no? The way it's broken down here seems hard to do unless the price per barrel goes down which more than likely won't happen drastically.
why did gas prices disconnect from oil this past two weeks
Thanks Sal for the breakdown. With the large state tax per gallon my roads should be awesome. Instead as ususal the government waste is a sad excuse for robbing the citizen.
Sal, was you about to say 'all of this other crap' at the 11.36 mark?? :O
Some is used to make plastics
@jaesnap But they aren't charging 2% of 15 cents, they're charging 2% of $4. which is 8 cents, or 1.5% of $4 which is 6 cents.
The US federal government makes the same or more money than the oil companies do from oil. So be sure to hold the Gov accountable as well. The oil companies lease the property from the Gov to drill and collect, then they get taxed on the Hydrocarbons coming off of the rigs, taxed coming out of the refinery and taxed at the pumps. Gasoline would be about half or a little less per gallon without Gov taxations.
So the Question Is why has the price of gas gone up so rapidly in the last 4-5 years? I've heard it was due to the forced closing of refinerys and higher taxes and regulation on gas companies by bush and obama.
Big oil is ripping us off. I can't imagine my father paying twice as much for gas. In 1965 it cost 31 cents a gallon, The inflation calculator tells me that it would cost 2.23 at todays prices. Big Oil is now forcing us to pay $4.00 a gallon. In 65 everyone was driving a gas guzzler. A 65 Mustang got you 17 mph. I know he wouldn't pay $64.00 a week for gas.
@bttruman Hold the phone! You mean to tell me that the president doesn't have magical president powers to change gas prices? Wow! And here I thought he was some kind of wizard.
Is China increasing oil prices for the US or is it all inflation?
Aren't credit card expenses more like 1.5 to 2% not 30%? On $.15 that would be only $.003 . Otherwise, great video as usual.
in the uk i think the tax rate of fuel is 20%(VAT) and they tax 58 pence per litre. i might be wrong but the fuel prices at the moment here are about £1.30 so if i take away the tax rate (1.30/100*80) then subtract 58 pence then the fuel prices would be 46 pence per litre, shows how greedy the government is
Next time show what you're figuring please.
How did it drop 9 years later to 2$ a gallon 2019 i think i seen it as low as 1.85 and i live in Connecticut! Lmao !
@GerardFreeman Or we can call Hugo Chavez and ask him to sell us gas at .11 cents a gallon. That's the going rate for gas in Venezuela. Of course it doesn't include shipping.
how about not worrying about gas prices because you suggested walking or taking public transportation :-)
@ontheotherhandx6 That's also true but then you have to consider that the big companies that sell and drill for oil wouldn't want this new energy competing with them. They probably lobby and influence our government to stick with energy from coal and oil rather than any new possibilities. Twisted games :\.
Every time he repeated something I thought:
HEAD ON APPLY DIRECTLY TO THE FOREHEAD
HEAD ON APPLY DIRECTLY TO THE FOREHEAD
HEAD ON APPLY DIRECTLY TO THE FOREHEAD
Brb I'm a gasoline expert now.
Oops, measure twice and cut once. Thanks...
@toxzen inappropriate comparison. the comment would get the point across by simply removing the adjective rape...
the higher the price of the raw petroleum, the higher the price of everything else---including the price of turning raw petroleum into essential products---we are trapped inside a feedback loop---it was ok back when petroleum was cheap---it is no longer ok
* 17 mpg.
Yeah but…. How does it work when we invade oil rich Third World countries?
Just be happy with your prices americans. It's over 2x higher in most of europe.
Lol at 11:35
@mtheory85 Shocking, isn't it. I may need to move out of the country for a while as I adjust to this new-found truth.
Oil lubricates the pistons and cam shafts in your cars... So what makes us think that massive tectonic plates don't need lubrication?
Earthquake warning! haha 8/11
Doesend the gasstaion it self have to pay tax again on they income? with mades they income even lower.
And 4$ per Gallon?! Wow you should'nd refuel in germany :P
This video aged well. 👀
@bttruman LMAO, someone who makes sense. Something must be wrong
place your ironically funny top comment here...
First?
The USD is worth about 0.04 cents today vs Federal Reserve inception (1913), so you're dead on; the value of our Unlawful and Unconstitutional fiat currency is killing us.
(not directed at you, per se)
Look up Robert Newmans "The History of Oil" (circa 2005?) on video . google . com to get some real life perspective
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youre fuel is cheap compared to england, its like $1.20 a litre their which is about £0.90 and the fuel here £1.30 a litre which is about $2.08 a litre, you are lucky
we could have cheaper gas... or the illusion of cheaper gas... subsidize the hell outa oil... (im not advocating subsidizing i personally hate it... im just making a bad joke)
Unlawful Speculation and Derivatives is what drives the prices; amongst other factors not even discussed here.
This is some seriously overly simplistic world view--though i understand the massive Fraud and Corruption cannot easily be explained in such a simpleton format as youtube+comments (nor should it).
The person who posted way below in all CAPS was more on the mark; shame (s)he looks like a fool (via using all CAPS) and is likely a CIA or NSA agent muddying the waters.
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What about OPEC, Futures Trading and the biggest factor is inflation or the declining value of the dollar. Why no inflation graphs? Yet another disappointing video. Living the good life must be getting to Salman.
Nah mane.. it's BYEDIN Bidens the reason gas prices are high 😂 you can't tell but I said that in a country accent. I live in TN and it's shocking how few people know how things work