Crude oil is cheaper, why isn gasoline?
NEW YORK – Crude oil prices have fallen to new lows for this year. So you’d think gas prices would sink right along with them. Not so. On Thursday, for example, crude oil closed just under $34 a barrel, its lowest point for 2009. But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year. Gas prices rose a penny more on Friday. To drivers once again grimacing as they tank up, it sounds like a conspiracy. But it has more to do with an energy market turned upside-down that has left gas cut off from its usual economic moorings. The price of gas is indeed tied to oil. It’s just a matter of which oil. The benchmark for crude oil prices is West Texas Intermediate, drilled exactly where you would imagine. That’s the price, set at the New York Mercantile Exchange, that you see in the morning paper. Right now, in an unusual market trend, West Texas crude is selling for much less than inferior grades of crude from other places around the world. A sever
Related Questions
- What is the process for converting crude oil into gasoline verses diesel fuel? Also what part of the crude oil is used for gasoline verses diesel fuel?
- On Monday, what news sparked fears of new record highs for crude oil and gasoline prices?
- How many gallons of Crude oil does it take to produce 1 gallon of gasoline?
