Quote:
Originally Posted by Rambit
Isn't it strange that oil prices have droped 15% and gas prices only 4%. Today oil is under $52 a barrel. Believe it or not, some gas station owners claim to have lost money last year. Some feel they're lagging behind in order to recoup losses from last year.
Again, believe it or not, some economists are predicting oil will fall to around $10 a barrel in the coming years. I don't think gas will fall comensorately though. Thanks II Kings 9:20 for your part in driving oil prices down though!
Rambit
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In general, it's because the gasoline that is at the station today was actually manufactured from oil that was purchased on the futures market at a higher price months ago. Depending on how big the original order was, it could have been over a year ago.
In times of declining raw material price, finished goods remain at a dis-proportionately higher market price. However, once the finished product price drops to a proportionate level, any increase in the raw material price will have the opposite effect i.e. the market price would be lower than expected for a higher raw material price.
The unseasonable East Coast winter has kept demand for petroleum products at lower than expected levels. Also, the Gulf of Mexico (GOM field) was uninterrupted this past tropical season and most all of it's production is back on-line from the damage caused by Rita and Katrina.
