Comments on: Why Gasoline Follows Oil Up But Not Down

By: Mighty Bargain Hunter » Roundup for the week of 14 January 2007

Mighty Bargain Hunter » Roundup for the week of 14 January 2007 — Mon, 22 Jan 2007 14:44:06 +0000

[...] All Financial Matters speaks of the correlation between gas and oil prices. [...]

By: paul

paul — Fri, 19 Jan 2007 19:59:32 +0000

I wrote a post that may help expand how prices rise and fall in response to JLP’s post:

Gas prices will change – so who’s at fault?

By: Sam

Sam — Fri, 19 Jan 2007 17:21:24 +0000

An interesting article in todays WSJ on oil prices at
http://online.wsj.com/article_email/SB116916946106281010-lMyQjAxMDE3NjE5OTExNjk5Wj.html

By: Jeremy

Jeremy — Fri, 19 Jan 2007 03:32:00 +0000

Easy E, I’m in the middle of nowhere a few hours outside of chicago.

By: Jim

Jim — Fri, 19 Jan 2007 00:26:59 +0000

This is what energy capital markets folks refer to a “upwards sticky” pricing. The only time they make money at the retail outlets is when oil goes up. They raise prices but the gas they are selling from the tanks was paid for at the cheaper prices. During the higher prices they get a shipment of gas at a higher price, so they are not going to lower gas price until they have used up all that expensive gas in the holding tanks. Otherwise that gas would be sold at a loss.

In a nutshell when retail stores make their profit is the time between when the price of oil goes up(and they raise the pump rate) and when they refill their tanks with that higher priced gas. For those few days they make an extra few cents a gallon.

By: Easy E

Easy E — Fri, 19 Jan 2007 00:22:42 +0000

$1.94 were are you from? It still is $2.50 here.

By: Jeremy

Jeremy — Thu, 18 Jan 2007 21:40:08 +0000

It does seem to go down much slower than it goes up, but I can say it has come down quite a bit around here lately. I just filled up this afternoon for $1.94 a gallon. Cheapest I’ve seen it for a long time. Wasn’t that long ago and it was close to 2.50.