They are up and they are down, and they seem to not be able to make up there mind, but unlike Katy Perry there is a little bit of logic behind the recent fluctuation of the gas prices and it goes way beyond the 140 characters of “Barrel prices down to $27, markets panic” 

Now oil is nothing, but a business at the end of the day. Like any business its all about breakeven cost as well as supply and demand. So lets take clothes as an example. You want to buy a new suit or dress for work, and you check several stores all with different prices. Lets say the each store had the clothes made in a different country, for example Saudi Arabia, Mexico, and United States. Now because of labor cost the breakeven price (price where company can make money) is different. For Saudi Arabia: $7, Mexico $27 and United States $40 and because of that the same exact clothes are priced differently at all 3 stores.

Now, when the average price of a suit or dress drops below $40 then the store that carries United States will stop producing, same goes with Mexico if the average prices drops below $27; leaving only the Saudi Arabia store producing the garments that you desire. Now, instead of Saudi just producing the same amount of clothes, they decide that they will increase there supply to keep up with the demand and keep the average price of dresses and suits low, this completely takes out the other two stores (U.S, and Mexico) and messes up the balance of the average price. Which therefore fluctuate up and down. Now it is up to the Saudi to decrease the supply and increase the demand allowing the average price to go up of dresses and suits.

Now replace clothes with oil and this is exactly what is happening, so when you hear Saudi Arabia cutting oil production down now you will understand what that means to your wallet. Yes we want low gas prices but we also want a stable economy and for the U.S to control their own oil supply.