2006-07-14 13:36:32 · 6 answers · asked by av8orrich 1 in Business & Finance ➔ Personal Finance
While oil is the underlying price for gasoline, one cannot be used to predict the other as they are both traded independantly in the market.
Gasoline will usually be effected by a change in the price of oil, but the demand for oil is not the same as the demand for gasoline.
It is possible ( and does happen periodically) for the price of oil to go up while the price of gas goes down as the price of gas is determined by the amount of driving done.
Oil on the other hand has many uses including airplane fuel, tar, powerplants, etc. and so is under a much moer complex demand model.
Every wednesday the govt releases numbers on the current supples of oil and gasoline in the U.S.. This is how much is available for sale in actual storage tanks.
There are weeks where the supply of oil goes down but the supplly of gas goes up (and vice versa) and the prices move in different direction.
So, one cannot be used to acurately predict the price of the other since one product's (gas) demand function is actually only a segment of the others (oil)
2006-07-14 14:54:50 · answer #1 · answered by urbanbulldogge 4 · 0⤊ 0⤋
I did a least-squares analysis of the price of oil vs gasoline or petrol and came up with this formula:
P = 0.029*O + 0.55
where P is the price of petrol and O is the price of oil. So if the price of oil goes up $1, the price of gasoline will go up 2.9 cents.
This formula will need updating soon, and note that it can't be used in certain situations; for example, when Hurricane Katrina stormed through the petroleum areas of the Gulf of Mexico last year, it destroyed refineries, and this caused the price of petrol to skyrocket and the price of oil to decline, since oil without any refinement is worthless. But the formula will give a good estimate.
2006-07-15 00:09:41 · answer #2 · answered by alnitaka 4 · 0⤊ 0⤋
Probably a few cents. Oil was in the $22-28 range for many years until Bush became President. Now its been in the $70-77 range for a few months and gas is about $3 a gallon. So it should only go up about another dime or so.
2006-07-14 21:38:59 · answer #3 · answered by NOVA50 3 · 0⤊ 0⤋
$15
2006-07-14 20:39:53 · answer #4 · answered by jason 3 · 0⤊ 0⤋
However much they think you will pay!
2006-07-14 20:39:43 · answer #5 · answered by wildraft1 6 · 0⤊ 0⤋
a lot
2006-07-14 20:39:43 · answer #6 · answered by Phil 3 · 0⤊ 0⤋