If the cost of barrel, for oil , has gone down significantly then how come the prices haven't?

Question

Everyday on the news it says it's going down from 130 to 125 to now 122 i believe but

If the cost of barrel, for oil , has gone down significantly then how come the prices haven't?

Answer 1

it takes time to see change, but here in texas the price for gas has gone down about ten cents since last week. here we have seen change.

Answer 2

Oil is bought on future delivery contracts . It takes a while to move through the system . Or so they say ?

Answer 3

Demand for gasoline has a strong effect on the price. As people use less and the market share declines, suppliers will reduce prices to attract more of the buyers.  Econ 101

Answer 4

They have in Australia by 10 cents a litre.

Answer 5

I have heard it takes months for that to happen.

Answer 6

They have  in my area, it went from 4.10 a gal to 3.65 you will not see a major drop unless barrel's go under 100.00 plus..

Answer 7

It has, but proportionally. There's a big difference between a barrel & a gallon.

Answer 8

They are? Didn't realize. Where I live, it hasn't changed. It could be because 1. With 5 dollars going down=1 or 2 cents off per gallon. 2. The people at the gas station would want an extra buck. But I'm not good at doing the math.

Answer 9

The only direct connection between oil prices and gasoline prices is when the price of oil goes up.  Then the price of gas rises automatically.  It apparently doesn't work the other way round.  It is a mystery.

Answer 10

It has gone down, where I live the price when from $3.99 down to $3.55 in a week and a half... it might just take a little while for your area...

Answer 11

While the price of gas is directly influenced by the price of oil (gas prices are falling) you have to remember a couple of things.  Price of gas is also affected by the ability of the refineries to produce the gasoline, and since the major oil companies continuously take down refineries for "maintenance", they are able to jack up the price of gas...  Supply goes down, demand stays the same....gas prices go up!

Answer 12

It takes a few days for prices at the pump to reflect the lower cost at the well.  Note that the cost of crude makes up only a small part of the price of a gallon of gas at the pump.  This is true of lots of commodities.  Farmers are always complaining about how they only get a few pennies for the wheat that goes into a $3 loaf of bread.

Answer 13

The price of gas where I live has gone down over 20 cents per gallon.  I watched the local stations resist going over the four dollar per gallon point while the price of oil was still going up, so I don't totally begrudge them recouping a little bit.  It's gone down pretty steadily though overall.  The national average is also declining steadily, from what I've seen in the news.