If the price of a barrel of oil has dropped so much, why isn't gasoline cheaper? ?

The price per barrel is currently $101.50. Why is gasoline still very close to it's high, when oil was trading at $147 a barrel.





Is there some kind of collusion or price fixing taking place between the big oil companies? Is it corporate greed? Why don't the governments do something to stop this gouging?





Will some people actually freeze to death this winter because they won't be able to heat their homes? If the price of a barrel of oil has dropped so much, why isn't gasoline cheaper? ?
That would be greedy gas station owners and state taxesIf the price of a barrel of oil has dropped so much, why isn't gasoline cheaper? ?
I was sort of wondering the same thing. A couple of weeks ago, gas prices had dropped, but when Gustav entered the Gulf and Labor Day hit, all of a sudden prices jumped back up about 30 cents a gallon and are still going up. I actually looked at DOEs weekly stats and compared the price of oil vs the price of gas. The price of oil is at the level it was on about the 1st of April, but gas is 20 to 30 cents higher. I've always been on the forgiving side of this but this episode looks a little shaky.
because the gas startions realized hoe much money they make so they keep it up because they are in competition with each other plus who ever lowers their price has to realize the gas in the tank underground will run out faster because the gas is cheaper than m,ost so they will have a hard time trying to re fill it
I'm certain there will be an investigation - there may even be reason for it. At face value it seems odd that oil has dropped by 1/3rd while gasoline prices have dropped by only 1/8th.





At the same time, gas and oil don't always move exactly together because they are related but not identical goods. As such, each has related, but separate, determinants of supply and demand, and they are linked inasmuch as oil is a throughput for gasoline.





Consider that demand for crude can drop while the demand for gasoline can rise. That may sound odd, but there is a mechanism that explains it.





We can't burn crude oil in our vehicles - we need it refined into gasoline. While we only have 2 or 3% spare crude production capacity, we currently have less than 1% spare capacity for gasoline. Part of this is that no new refineries have been built for a decade - some are under way, though. Blame in part environmentalists who don't want more refineries, which are polluting and ugly. Blame also the oil companies who don't want to invest $4 billion over 5 years to build a capital asset that will cause the price of their main product to drop.





Also, crude oil prices are more heavily influenced by speculation because crude oil is traded on the futures market, while gasoline is not as subject to speculation by entities who are not involved in the business. Futures contracts are the way that producers and purchasers hedge against price shocks in their most important product, but gasoline with a $2.xx futures price (yes, $1.50 cheaper than retail prices) cannot earn money as rapidly as oil with a $100 price tag. This is perhaps why thrice the oil contracts are traded as gasoline contracts. Thus we should see oil prices move with greater volatility than gasoline prices - the latter more accurately reflect supply and demand. Therefore, we should expect to see a bigger drop in oil prices after a big run-up.
Oil is sold on futures their is about a 2 month delay.


We have to go through the storage of higher first.


Besides, Gas in missouri has gone from ~4.00 to ~3.40


About a 40-45 cent drop. 101/147= .72


3.4/4=.85%. This lines up well with the 120-130 price of oil we saw a month ago. Once inventories of the expensive oil/gasoline go down you will se a price drop.
The Devil says so.
Better question, just why did all of the stations in my area, raise the price on all grades $ .25 a gallon yesterday ?


And the government claims they can find no evidence of price fixing.


Where are they looking, under their beds?
That's an excellent question and I'll be anxious to see if any forum member has the answer. I believe the real answer is greed - not an economic market force.





Added:


But, Stereotype, it takes them nanoseconds to raise prices at the pump when oil goes up!
Uhhhm Uhhhhm... supply and demand?? No,uhhhm trickle down economics... no uhhmm uhhhm, let's drill in Alaska.


Teacher says everytime the price of oil goes up an oil executive gets his horns.





LMAO.
It will come down. We are still buying the oil that companies paid $140 per barrel.
Well gasoline is 60 cents a gallon cheaper here, than it was two months ago.





You do know, while oil prices increased 217% since Janurary 2007





The price of gasoline, only increased 91%





You do know, oil companies, have to buy 70% of the oil they refine, from other countries, right ??