Over the past two weeks prices in gas have come down 33 cents, with the average price of self-serve, unleaded gasoline on Friday in the United States at $1.97, reports CNN.com.
In July, the high was at $4.11 and the decline has slowed somewhat, although still greatly appreciated, by consumers, at least.
Oil prices are rebounding off lows this morning, having jumped $5 to nearly $55 a barrel. The boost seems to owe much to the bailouts, but one analyst says that after the excitement wears off, oil will go back to being more influenced by issues of supply and demand, reports Dirk Lammers for the Associated Press.
- United States Gasoline (UGA): down 56% since Feb. 28 inception
The relationship between oil and gas prices is not a linear one, and the confusion begins when crude prices per barrel do not equate with the pump prices, reports Katherine Rampell for The New York Times.
In the futures markets, a gallon of gasoline has been, on average over the last six years, 22 cents more expensive than a gallon of crude, according to John C. Felmy, chief economist for API, with a barrel of oil containing 42 gallons. Right now the decline in gas prices is outpacing the oil prices in the futures markets.
On average over the last six years, a gallon of gas on the retail market has been about 99 cents higher than a gallon of oil on the futures market, according to Felmy. Take into account that oil future prices are also passing along the production, refining and distributing costs to consumers, so there are many supply and demand factors to consider.
Diesel fuel is also a factor, as it is used more so around the world for power than in the United States. Foreign relations is another big issue, as any cartel-imposed whim may disrupt the oil supply.
- United States Oil (USO): down 45.9% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.