Saturday, August 29, 2015

Where's promised cheap Gasoline after Crude Oil Plunged 50 percent?

From the August 2014 to August 2015, the Crude oil prices have dropped 60%. Where as the Gasoline for the same time has only dropped from $3.40 to $2.63, which is only 22% drop. What happened to promise that the cheaper Crude price means, cheaper gasoline? For the month of July 2015 at $2.70 a gallon, the EIA analysis shows that 46% is for Crude, 25% for refining, 13% distribution&marketing and 16% for taxes. So, what really happened? In California, the average price of regular gasoline across CA was about $3.90. That's only 10 cents lower than last July's average price in CA. This is even more mysterious as why the Gasoline price seem to have divorced from Crude oil price. We know that there a lag time of 3 months, from the crude oil price drop in the markets, to get the crude oil to refinery at the new market price. Here, the Crude oil prices have been continuously falling since last August. So lag time is not at play for not seeing the lower prices? So, what is the reason?
The bottom line: U.S. oil refineries have profited from processing cheap oil and passing only some of the savings to consumers.

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