People already figured it out and the details have been posted many times. During the pandemic, there was low demand, so the price dropped. People saved tons of money during the pandemic. The economy started booming, there's record employment levels, salaries are increasing, companies can't find people fast enough and pay them high enough wages to keep them, people have money to spend, they're buying up everything as fast as it can be put on the shelves. Which reduces supply. Which increases price.
I eat lunch with several guys that constantly comment on the price of fuel that's "killing me". So I asked all of them if they've:
- modified their driving habits because of it? Nope.
- How many times did you go out to eat last week? A few.
- Did you get a raise this year? Yes, we all did.
- Have you lowered your 401K contributions? No.
- Do you use credit cards that you don't pay off monthly? No.
- Have you had to cut back on anything at all? Not really.
- Do you want government to regulate industry? No.
But you want government to do something about the price of fuel? Uh, errr.
Fuel, food, building materials, clothing, cars, you name it; as long as people keep buying things companies will keep raising prices to see how much blood they can squeeze from that turnip. It will only reverse course when people stop buying things and that hasn't happened yet.
And, even if that does happen, prices will never go back to what they were, because on average, people make more money now than they did before, so prices will only drop as low as the market conditions warrant.
Supply and demand tempered by disposable and discretionary income.
ycharts.com
