U.S. drivers may have noticed that gasoline prices at the pump have declined to about a 33-month low. However, an exchange traded fund that tracks gasoline futures has risen for the past week. What gives?

Historically, retail gasoline prices have lagged wholesale prices on the way up and on the way down. Consumers typically don’t immediately see wholesale price increases since retailers have to gradually absorb the price to keep customers. On the flip side, once wholesale prices decline, retailers will keep pump prices elevated to make up for what they lost.

Earlier this week, U.S. average gasoline prices hovered around $3.18 a gallon, the lowest since Feb. 22, 2011, the Wall Street Journal reports.

Meanwhile, the United States Gasoline Fund (NYSEArca: UGA), which tracks gasoline futures, is up 7.4% since the Nov. 7 low, and the ETF gained 2.4% Thursday. Nevertheless, UGA is still down 6.5% over the past three months and 3.6% year-to-date.

Gas prices have decreased due to refineries increasing production from converting petroleum from the U.S. shale-oil boom into diesel for exports. Gasoline is also produced in the same process.

“Refiners are still making money on diesel, but gasoline is almost a byproduct,” Sarah Emerson, managing director of consulting firm ESAI Energy, said in the WSJ article.

Gasoline futures, unlike gas pump prices, will experience short-term volatility – pump stations typically don’t change gas prices 50 cents on any given day. Nymex RBOB futures have rallied sharply recently on rising Brent oil prices abroad due to oil supply disruptions in Libya and stalled talks over Iran’s nuclear program, reports Sharon Epperson for CNBC. [Brent ETF: The Better Oil Futures Play]

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