Up Faster Than Down
I did a post back in September about how gas prices weren’t sliding down as fast as they climbed up when oil hit $145 in July.
Oil is at $59 today with world demand way down and supply way up.
Back in July gas here in Atlanta was about $4.09. Today it’s about $2.05 with a few stations as low as $1.95. But, if I do a ratio of oil and gas prices back in July and today, it should be $1.67 or less a gallon.
For those of you that look at all the technical stuff, OPEC is reducing production a bit which doesn't seem to be maintaining price; and, we are into winter pricing given lower demand and use of less expensive winter blends.So, the price actually should be lower than a strict ration of oil and gas would indicate.
I guess supply and demand does work, with demand working slower than supply when it takes over driving price.
8 comments:
well I for one don't see the need for a change in winter/summer fuel. To winterize it they just add sulfer and don't purifify it as much. I would think that adding sulfer would offset the price of not purifying it as much.
It's $1.79 near Corpus Christi, TX......
Jenny,
The problem with boutique gas is that there are too many flavors, as I've read. Once you get off the Baskin-Robbins menu in the winter, the overall price goes down. Don't quote me.
Mffn,
Welcome, I'm jealous.
There was a piece on NPR this morning about why there are still fuel surcharges on plane tickets, taxi rides, etc.
As far as I could follow the reasoning the answer is: Because.
Down to $2.49 at some places in Chicago and we're dancing in the streets.
But OPEC isn't going to lure us into resuming our bad driving habits again, are they?
I hope not.
SUV sales are up. No kidding.
A seller raises prices faster due to uncertainty and they lower them slowly for the same reason. It's all about protecting yourself from uncertainty. In the case of gas, they are still selling expensive gas as the prices drop, so price changes are further slowed.
Do the ratio the other way around. What was it when oil was $55/bbl in 2006 vs what it is now. You will find that the gas price never kept up with the price of oil over the summer. Facts are the unfortunate buzz kill for the conspiracy minded.
Jay, assuming you're right, not a buzz kill for a conspiracy nut, just a flaw in my unresearched analysis.
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