Why haven't gas prices kept up with the price of crude oil?

Question

Saw $3.15/gallon today at the pump, when a barrel of crude oil is selling for $98..A few months ago, when it was selling for around $75, I paid $3.65/gallon, at least one time that I know of. Both prices were at the same station.

Answer 1

To learn about the gas price, you need to first understand the components of the gas price. The following page clearly illustrates how the gas price is derived. It also has a link to another article describing why gas price fluctuates. Check it out and hope it is useful.

Answer 2

speculation, but the oil companies have figured out that we won't pay too much more than we already are. gas prices have more than doubled in the last 10 years. Prices of a barrel were the same a few months ago (year ago?) as they were in the oil crisis of the 70's, yet prices at the pumps were much higher recently. Doesn't make sense when you look at the time value of money. The oil companies often say that prices depend on reserves, but when prices go up and down quickly i have a hard time believing that one. Personally, i think its jsut a capitalist sham.

Answer 3

And it costs the oil companies $2-$5 a barrel to pump, and another $8-$10 to refine. So they pay $18 on average per barrel real price. So to answer your question, it is all about greed. It totally does not actually cost $98 for CRUDE.

Answer 4

mutually as the fee of gas is linked with crude oil it is not any longer ruled by utilising it. at the beginning it takes a mutually as for the oil to be transported to the U. S. the gas costs we see on the pump will replicate the fee of crude oil a pair of month past. additionally there are style of chemical strategies executed to extract gas from oil each and each requiring their own chemical compounds, as oil materials right this moment are a lot extra crude than till now those technique require extra to get much less gas. Hydrogen is now getting used for the extraction technique so if the fee of this gas will boost so will your invoice on the pump. There are different factors to evaluate as nicely, although this ought to truly merely be a controversy for yet another decade or so as i'm listening to good issues approximately our government helping determination capacity exploration.

Answer 5

There are more issues that just the price of crude oil which go into the price of gasoline. At the earlier period, many of the refineries were having production issues - so the pricing was higher based on a more limited supply from refineries not from the price of crude.

Answer 6

There is a substantial processing time lag between the spot market on crude, and finished products leaving refineries. Though a sudden increase in crude will often trigger a smaller increase in the price of refined products due to speculation or increased demand from consumers who fear a shortage.

In the US, there are also seasonal variations in demand, with prices generally being higher in the summer months due to increased demand.

Answer 7

Supply and Demand.
If there is a demand for gas, the people at the gas stations will try and drain as much as they can from you.
Last year, gas in NY had just hit $3. but when i went to school out in OH, Gas was only $1.99..
Its all about the surrounding economy and demand for gas.

Answer 8

We are heading into the Holiday season which will also aid the supply and demand scenario. Demand is high and supply is low coupled with the high price per barrel gas prices will continue to rise.

Answer 9

Just be patient. They're talking 4 to 5 dollars a gallon by next spring. Let's see how many folks can live with that...

Answer 10

The Federal Reserve Banking system manipulates the price on all commodities, so there is no such thing as true supply and demand.