Monday, April 26, 2010

If the prices on gas and oil rise on the stock market how does that affect prices for us?

I have seen oil and gas prices rise on the stock market. Does that mean our prices, we are charged are going up, the same if there prices go down do ours?If the prices on gas and oil rise on the stock market how does that affect prices for us?
To a degree - Yes. In certainty? Not exactly. the prices you see reported are futures contracts. They do some of the price driving but not all.


Also, for whatever reason someone might guess, gasoline and oil prices are nor as closely linked as they were 2-3 years back. Then it went hand in hand, oil up today, gasoline up tomorrow.


Natural gas is at a 19 year low ratio to oil right now. Again, the reason is not clear but it does seem that supply, for the moment, far exceeds demand. Get one good cold month and that will disappear.If the prices on gas and oil rise on the stock market how does that affect prices for us?
Yes. The futures price of oil and the price of gasoline are very closely correlated. The price of gasoline is based on the futures price of oil. Its the next load of gasoline they buy and not the last load that influences the price. If the futures price of oil goes up so will the price of gasoline and vice versa.

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