Why are gas prices still rising if the price of oil is going down?

Question

Stupid me, I thought that the reason gas prices were going to climb to $4 this summer was because the price of oil was skyrocketing. Well now oil prices have fallen and yet gas is still rising. What's the deal? Obviously my Economics 101 class was not enough to enable me to understand all this lol.

Answer 1

Silly - if gas prices went down, the big oil companies would have to give up billions in profits. It's also a mind game. If gas stays at $4 / gallon for six months, then drops down to $3 / gallon, consumers will be cheering in the streets, even though they're still paying twice what they were paying two years ago - and big oil still makes a hefty profit. There is one upside to the $4 / gallon though, way less dump truck sized SUV's are being sold - right now they can't even give the things away, which for the environment is a very good thing. Auto dealers don't even want them as trades anymore. It does give me a good feeling when I fill my little 4 cylinder for $40, while the jack@ss next to me in his Hummer is forking over $100 or more to fill his tank. Heh heh.

Answer 2

It takes a few weeks for the price of oil to come through in the price of gas.  So based on what has happened lately, $130 a barrel should get us above $4/gallon for the national average.  So you should see it continue to rise, and then if oil keeps going down, gas should in a few weeks also.

Answer 3

MY GUESS WE THE PEOPLE ARE PAYING FOR EACH BARREL OF OIL PLUS A HEFTY PROFIT TO ALL THE OIL COMPANIES, SO THEY CAN GET RICHER AND RICHER, MY GUESS IS WE'RE ALLOWING THE OIL COMPANIES TO MAKE $2.50 TO $3.00 PER GALLON TO AMERICAN AND ENGLISH OWNED COMPANIES. BAD THING ABOUT THIS IS THERE'S ANOTHER SOURCE, BUT OUR PRESIDENT BUSH DOES'NT SEEM TO BE INTERESTED IN THIS NEW SOURCE, I GUESS ITS BAD FOR HIS TEXAS OIL STOCK.

Answer 4

Oil has only fallen $8.00. That translates into a whole $0.05/cents at best...  Call me when you want an answer to that question after oil fails $20 or $30/barrel.

Answer 5

Environmental legislation has required additives to be included into gasoline to reduce US gas emissions.

Increase in input costs, increase in the cost of products.

Answer 6

The price you see on the news is the futures contract price of light sweet crude.  Over 75% of the oil is sour crude which costs 10-15 dollars less a barrel.  This contract price is difficult to find and the media does not report it.

Answer 7

The oil companies see that we are hooked. They see that we have almost no choice but to pay and they have dollar signs floating in their heads. If you noticed, when they held the congressional hearings about fuel prices, they oil execs were very smug, then gas prices went up.

There is no competition because they are all in it together and they have nothing to compete with them.

Answer 8

oil prices is like a roller coaster ride, it's going to be back up soon.