Oil Prices?

[caryrae]

If oil is down to $102 a barrel now, why are gas prices still so high (still at about $3.50 a gallon here). Is it because the oil was bought at the higher price so they have to sell it higher or what?

I guess gas is down about 50 cents from the peak price but it is still high.

[sisterdisco]

You can be happy that you don't live in upstate NY. It is $3.72/gal here!!

[medic9016]

If oil is down to $102 a barrel now, why are gas prices still so high (still at about $3.50 a gallon here). Is it because the oil was bought at the higher price so they have to sell it higher or what?

I guess gas is down about 50 cents from the peak price but it is still high.

I believe you are correct. I read today that the oil price drop will stop a $100 a barrel. So prices may not drop much more.

[MauiMouse]

Shoot, I'd love to pay $3.50/gallon. We are at $3.95, it jumped up over .30 yesterday. I filled up before hand at $3.69 and thought that was good.

[dnickels]

The main reason gas prices haven't come down as quickly is that during the price run up the refiners were basically eating that cost rather than passing on a proportional price hike in gasoline costs. I know I know, they're supposed to be evil and all, but if you look at financial reports for some of the bigger integrated oil cos you'll see that most of their profits in recent quarters have come from the production side of things while their refining operations make far less than they did when oil prices were lower.

And remember, if gasoline directly tracked oil from the time oil was around 10 dollars a barrel and gasoline was 1 dollar a gallon we would have been paying 10-14 dollars per gallon this summer!

And I promise I'm not an oil co. executive! I recently bought some stock in Conoco Phillips so I've been doing a little research into the industry.

[Jeff G]

I've been trying to figure this out myself. I've heard many accounts why the price per gallon hasn't fallen proportionately with the price per barrel and I'm not sure I buy it all. Supposedly the refineries are back logged (this was the excuses I heard even before Gustav). I don't buy it, the US was using more gas last year by 2+% over this year, weren't they then refining more last year? They were keeping up and prices didn't sky rocket.

In the past the price per gallon versus the price per barrel held very proportional. In January of 2006 we were paying $2.09 a gallon and the price per barrel was $63(gas was 3.317% of the price per barrel), last year we were paying $2.75/gallon and the price per barrel was $82(3.35%). Todays price is $3.69 with the price per barrel at $104(3.54%). I ran other dates and it seems that normally gas is running close to 3.33% of the price per barrel yet as we are suffering due to high gas prices the percentage is up. If the current price was based on past percentages the price should be closer to $3.46/gallon.

When prices were on the way up every time oil inched up even a a dollar or two the price at the pump also moved up. Yet here with oil prices down 30+% the price per gallon is down just under 20% from our peaks and it takes a long time to see the benefit. To say were paying more now because the reserves we're using today are from the higher rate why did the price at the pump jump up as quick as the price per barrel went up. It didn't take days or weeks, if the price per barrel went up Tuesday I could count on the price at the pump going up by the end of the next Wednesday. Based on this logic shouldn't it have taken weeks for the price to go up?

I'm not bitter at the oil companies, they made record profits but thats because whatever the mark up they charge the profit is going to be double at $4/gallon vs $2/gallon. What I don't like now is that someone is gaining by not dropping the prices as fast as they went up.

[mickeyd]

Gas is about USD $4.40 a gallon here in Australia

[Disneyfun]

Just remember that when the oil companies have posted their 'profits' this is after they have written off all 'costs', 'salaries', and all other 'things' that they can. This is nothing new, all companies have done this to reduce their tax liability. With this in mind, I just ask myself how much did they really clear?

[barnaby]

In the past the price per gallon versus the price per barrel held very proportional.

This summer was a bit different.
In July, prices at the pump peaked around 4 bucks - the barrell was $130.
The barrell hit $145, but the pump price stayed trelatively the same.
Then then barrell dropped, and yes, the pump prices lagged but dropped nonetheless.
Then Gustav hit, the barrell still dropped a little after a quick, small climb, and prices at the pump jumped.
They just started to creep back down at the end of last week, but have now crept up a little due to Ike.