Oil prices low but why are gas prices still so high?

[Jesseda]

Oil prices are 80 dollars a barell right now just last week it was almost 100 dollars... why are gas prices still above 3.00 a gallon? when the oil price was at 140.00 a barell the gas price was around 4 dollars a gallon, so whats the deal with these gas prices, it doesnt make sense, i would think the price should be around 2.50 a gallon right now

[Achilleslastand]

They lowered a bit today i noticed and should lower more over the next few days. That is a good question though as a gallon should be about in the 2.60 range.

[cameron_405]

...profit margins and 'workthrough' -- Google 'crack spread'.

[cameron_405]

...profit margins and 'workthrough' -- Google 'crack spread'.

...this might help, too --

WASHINGTON (MarketWatch) — Airlines are drowning in high fuel costs as the price of oil soared from a year ago and wiped out profits, but the recent respite in crude prices aren’t likely to help.

[venture]

Oil and gas companies have no clear advantage in lower end user fuel costs, very quickly, when the usage is still going to be there. They'll enjoy the additional profits and post record earnings for the quarter.

[Bunty]

Oil prices are 80 dollars a barell right now just last week it was almost 100 dollars... why are gas prices still above 3.00 a gallon? when the oil price was at 140.00 a barell the gas price was around 4 dollars a gallon, so whats the deal with these gas prices, it doesnt make sense, i would think the price should be around 2.50 a gallon right now

My guess is that the gas places are still trying to sell off gas they paid higher prices for. So probably the more gas a place sells the more often it changes its prices.

[HewenttoJared]

Because the price you pay for anything isn't based on its actual cost, but what people are willing to pay.

[Bunty]

Because the price you pay for anything isn't based on its actual cost, but what people are willing to pay.

And a lot of people are willing to pay higher prices for gas. If the actual price goes down, gas sellers will gladly pass it on to the customers and to meet competition, unless demand picks up greater than the supply.

Unless they're merely following orders from the head office, maybe people who clerk at convenience stores have a better idea what happens before they change the gas prices.

[Larry OKC]

As the former head of Shell said in a recent interview, prices shoot up like a rocket but float back down. The reason given is most gasoline is paid for in advance or upon delivery (instead of being billed later). You aren't paying for the price of the gas in the tank under your feet but for the replacement cost of that gas. If the cost is trending up, they are going to charge more and the price change is reflected almost immediately (even when they haven't received a delivery). But when it is trending down, they aren't as quick to adjust.


Jesseda is very close with the $2.50/gal figure. Over at GasBuddy.com, they have charts that show you the trend of price of oil/gas. Over the past 2 year period when oil is around the $80/bbl range, price of gas was $2.60 range. Keep in mind that is the US average and typically Oklahoma prices tend to be below average 9as they should be considering we are an oil producing state with several refineries).

[SoonerDave]

Give it a few more weeks. As bad as things continue to be economically (and really always were, Dow >12,000 notwithstanding), and economies stagnating, that oil price is liable to cool off for a time. It will show up at the pump.....albeit slowly.

[Roadhawg]

Saw one at $3.15 for reg. the other day

[sacolton]

$3.30 is the cheapest I've seen it. (Edmond)

[Roadhawg]

$3.30 is the cheapest I've seen it. (Edmond)

This was down on 10th and MacArther

[ljbab728]

I saw $3.22 today at 63rd and Meridian.

[cameron_405]

Give it a few more weeks. As bad as things continue to be economically (and really always were, Dow >12,000 notwithstanding), and economies stagnating, that oil price is liable to cool off for a time. It will show up at the pump.....albeit slowly.

...biggest concern I have is not falling oil and gas prices -- it's the OPEC cutting back on supply; not the fairest 'market players' in the world.

[Jesseda]

HERE it is over 2 weeks and gas prices are higher here in oklahoma then two weeks ago and the oil prices are still 10 dollars a barrell cheaper then a month ago, oil is around 84.00 a barrel and this morning at 7-11 off s. penn and 134th streey it was 3.49 a gallon, at that price the oil barrell should be around 120 dollars a barrell..

[HewenttoJared]

Because people will pay.

[Just the facts]

HERE it is over 2 weeks and gas prices are higher here in oklahoma then two weeks ago and the oil prices are still 10 dollars a barrell cheaper then a month ago, oil is around 84.00 a barrel and this morning at 7-11 off s. penn and 134th streey it was 3.49 a gallon, at that price the oil barrell should be around 120 dollars a barrell.. WHY IS GAS PRICES STILL SUPER HIGH

It is because there are different market forces for rising and falling prices. Rising oil prices have an immediate impact at the pump because the gas station owners have to stay ahead of the price curve so he can buy the next shipment of gasoline. The longer gas sits in his tank the more he has to charge per gallon to stay ahead of the price increases. When prices are falling, his only pressure to lower prices is competition, which is a slower market force.

When oil prices are going down and there are two gas stations next to each other and one is selling gas for $3.31 and the other is selling it for $3.30, look at the people at the $3.31 pumps - they are the reason gasoline prices aren't going down as fast. Competition is the only tool consumers have at their disposal and when they don't use it they are at the mercy of the vendor.

[Thunder]

Most of these gas stations (companies) order their gas months in advance, so it takes quite some time for the prices to drop, Jesseda. We're paying the prices that was ordered months ago. Gas ordered now will reflect on the prices in the near future. Just give it time.

[MustangGT]

Most of these gas stations (companies) order their gas months in advance, so it takes quite some time for the prices to drop, Jesseda. We're paying the prices that was ordered months ago. Gas ordered now will reflect on the prices in the near future. Just give it time.

This!!!

[adaniel]

One thing to remember: Brent Crude, which is the preferred international price, is still way up there. Today its $110/bbl. That is not coming down until the situation in Libya is resolved even though Libyian oil is hardly a fraction of total world output

[Thunder]

Another factor is the brave gas station owners/managers pushing the prices up to turn over profits. Other stations see it and push their prices up to get as much profits possible. Businesses are always worried about making profits. When a station drop real low and keep dropping, then it forces other stations to do the same to keep the customers coming. Its like a domino effect. So many different factors, Jesseda. And of course, situations oversea and hurricane season, as we all know it are greatly worshiped by owners/managers to be given free excuse to raise prices as much they can.

All in all, I'd say that gas prices now are still considerably cheap as compared to other states and countries. Its nowhere near $4, so be thankful for that. If you regularly shop at Homeland, you will enjoy the added bonus of knocking the prices down potentially under $3, but only if you prefer and regularly shop at Homeland (only those that has got the plentiful cash flow with huge bank accounts).

[sacolton]

Gas actually went back up. From a low $3.24 to $3.49. Makes me sick.

[sacolton]

Unfortunately, America was built upon cheap oil. We relied on it too heavily. Now, we can't ween ourselves off it and moving to an alternative energy source is taking way too long. We should be all driving electric cars by now, but technology in battery storage wasn't suitable years ago ... although it's getting better. Looks like natural gas is a better solution for now.

[Achilleslastand]

They did go up a bit today and probably will go up more as the hurricane hits the east coast. Still would like a logical answer as to why when the price of a barrel of oil goes up you see the results immediately at the pump but when the price drops of a barrel of oil it seems to take it quite a bit longer for us to see the results at the pump. Greed perhaps?