It seems like I’m always blogging about oil prices….but I guess that’s the “topic du jour.” Anyhow, one thing I came across in today’s reporting that did not make it into my story was that crude futures are falling much quicker than retail gas prices (big surprise there…right?). In the last seven days of trading the price of crude oil is down about 13 percent…now at $128 a barrel. In that same time frame, the national average for a gallon of gasoline has dipped only 6 cents or 1.5 percent to $4.05 a gallon. I’m not exactly sure why this is the case…although I could probably hazard a few guesses. But, I do know that gas prices moved higher at a much slower clip than crude prices. So, it’s only fair that they fall at a slower pace. Right?
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Comments
The reason gas isn't $3.67 is simply supply and demand.
The recession is on whiched has caused business to fail reducing the need to move as many goods and servies as they would have.
Also, people are still out of work and losing their homes so they are counting every mile they drive.
The supply is high, the demand is low, the price is low.
But in the summers of 05 and 06 and even 07 when the sky wasn't falling, people were going on vacations and making decisions based on having a supplemental income for years to come.
Its' a good time to be an investor.
Back in May 2008 when the price of oil hit $126, the price of gas jumped to $3.67. Why isn't it selling for that now? The arguments back in May are the same today, but the cost of gas at the pump is still above $4 a gallon.