Oil Prices go down gas prices go up?

It may be my imagination but it seems that when crude oil prices go up the prices for fuel at the pump go up immediately, however when crude oil prices drop the price we pay at the pump continues to rise or stay high for a much longer period of time.

How is the price we pay for fuel actually related to the price for crude oil?

Does anyone know why this happens?

it's because we the consumer have no say so in the matter so the oil companies dictate whatever prices they want. If they keep prices up for One day more than they need to it equates into huge profits. Like Exxon reporting 14billion in 3rd quarter 07 profits. Over and above operating cost. Profit. Best advise I have is bend over and take it like a beeotch.

reply to post by Mason mike

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Couldn't have said it any better than what you just did. Why are prices high when there is no shortage.
If they want the money then the people will pay.

reply to post by The_Alarmist2012

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www.zealllc.com...

Look at the last chart and the Oil to Gas Ratio (OGR)
Also read teh text under the chart.....

Gas is actually lagging behind crude oil price........
I did hear on a radio program that the lag is intentional and
the difference is being made up on JetA fuel prices.........
Who knows.........?



[edit on 17-7-2008 by Pinktip]

[edit on 17-7-2008 by Pinktip]

The gas in my city actually just dropped a couple of cents...about 5 at each gas station....I was happy.

Tela

This has nothing to do with any sort of conspiracy, it usually takes 1-2 weeks for oil prices to work their way to the pump...it has ALWAYS been like that. It has to do with FILO accounting and the supply chain. Don't worry, you'll see lower gas prices in the coming weeks

I paid 3.89 in Ohio yesterday on my way back from a trip to chicago. Seems to me prices went down.

-Kdial1

reply to post by Pinktip

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Exactly... in our area is seems as though the lag in adjustments from crude pricing to the price at the pump can be as much as 1.5 months. It takes a while to deplete higher priced supplies in the ground tanks or local/regional supply depots before they start filling them with the gas priced as a result of the lower crude pricing. Lag, simply.


[edit on 17-7-2008 by Lost_Mind]

Someone once told me something about oil/gas prices that seems to be truthful:

They go up like a rocket and down like a feather.

That's about where Ohio has been sitting for the last month. Here in western Pennsylvania, we've been stuck at 3.99 for about 3 weeks now. I've been to Ohio twice in that 3 week period and it's about 10 cents cheaper.

reply to post by Lost_Mind

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If that were the case then when some oil tycoon's great grandbaby's dog is kidnapped and the price per barrel goes up by $5 you can bet that the price at the pump will go up by $.10 within 15 minutes. It has happened in the past and the same gas was in the ground the day before. That dog ain't huntin'.

reply to post by jerico65

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That is exactly what I am talking about, I suppose perception isn't actually the truth.

I swear it seems as though when there is news of a spike in crude oil prices in short time or almost immediately prices at the pump go up, yet when there is news that crude oil prices drop sharply there is little or no change in the price we pay for a much longer period of time, or the lower prices occur slowly and in much smaller increments.

I like it when I learn from other members. Thanks Pinktip and Lostmind. If I were to buy a box of candy bars for 50cents a piece and the next day I ordered another box that went down to 40 cents a piece, there is no way I'm going to sell that first box cheaper then what I paid for it. I understand now.

Link : www.oilwatchdog.org.../ExxonMobil


image source: http://www.reachingtruth.com/images/israeli_pipelines_lg.jpg

reply to post by Mason mike

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Euphemisms and colloquialisms aside, there are exceptions in any instance, no doubt, but can you be a bit more specific as to when this abrupt reaction to price per barrel to price per gallon at the pump happened?

I know that when the Katrina disaster happened, when most of the rigs in the gulf went offline, the domestic reaction was fairly quick but there was even some lag in it. It was a quicker reaction due to the proximity of the supply to its demand market.



[edit on 17-7-2008 by Lost_Mind]

royaldutchshellplc.com...'n-word'ia-are-safe/


reply to post by Lost_Mind

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I wish I kept better records but I am very in tune to the cost as I fill up three times a week when I am busy. The cost was $2.99 for the sake of agument (I am not sure what the cost was during this particular event). A news report came out that a Shell Oil executive had a family member kidnapped ( I think it was in Africa). The price went up to $3.09.9 within 15 minutes. I drove past the station, heard the news , went by the office, and drove back. After that event it took about two weeks to go back to $2.99. there have been numerous other events like this but that one sticks in my mind. The thing is that the gas in the ground is the same gas they bought for $2.20 a gallon say. When the event has cleared, the story is the gas they had in the ground was paid for during the high cost time. It can't work both ways. Or shoud I say I isn't supposed to. I can probably find the documantation for this but it isn't nessesary. Ask anyone with a car and they will tell you the same thing. This is kind of a hot button for me. The customers I support spend more for gas so they have to cut out the extras, like having their computers fixed. So my business slows down. Way down. If the gas prices went back down, this economy would bounce back quickly. It really is that simple in my opinion. Thanks for your time.



[edit on 17-7-2008 by Mason mike]

[edit on 17-7-2008 by Mason mike]