Oil Prices vs. Gas Prices

Light sweet crude ($/barrel) 72.70
as of 10/16/08.


If Crude Oil is $148.00 a barrel, and Gas Prices are around $3.95 a gallon,

Wouldn't it make sense that when Crude Oil get's down to $72.70 a barrel, that Gas Prices would be around $1.98 a gallon?


Makes sense eh?

I'm seeing...... $3.09 (lowest price) here in Boulder.

When Crude Oil prices go up, the price at the pump goes up, next day at the latest.

How much is gas at your gas station?


Anonymous said…
Oil & Gasoline prices don't have a linear relationship. The price of oil is only one component of the price you pay at the gas pump. Among other things, the cost to refine it, store it and ship it are all reflected in the price. Taxes are also a significant part of the price, and these are generally per gallon, not a percentage of the price paid, as sales taxes are. Also, oil prices are quoted from the futures market, which do not reflect the price a refiner is paying for at that moment. A refiner may also have reserve supply built up. Refiners also cut their profit margin when prices get really high - look what happened to stocks of companies that just did refining vs. the integrated oil companies that actually drilled for crude.

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