Gasoline is traded on the world market as commodity like wheat or cotton. Speculators buy futures contracts in order to make money. If I believe that the price of gas is going to rise I look to the futures contracts. Gasoline is selling today at $3.02 per gallon whole sale. If the July market is selling at $3.45 and I believe because of increased demand in China the market will go higher, I purchase a futures contract. I tell my broker I want to buy a million dollars worth of July gasoline at $3.45. When July gets here and the price is $3.50 I sell and make a profit. If the price is $3.40 I take a loss. Every day there are buyers and sellers and the combined activity of all of them determines the price.
Some people want to blame the oil companies for the high price of gasoline. Right now the US refineries are close to capacity and the demand for gasoline in the US is down so they are producing more gasoline than is needed to supply the US market. They are selling the excess to China. This has no effect on the price of gasoline here in the US. These refineries do not set the price and neither does demand in the US. The price is determined by world demand and speculators buy and sell every day trying to guess the future demand.
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