The Link Between Crude Oil And Gasoline Prices

[thackney]

The Link Between Crude Oil And Gasoline Prices
https://www.forbes.com/sites/judeclemente/2018/06/27/the-link-between-crude-oil-and-gasoline-prices/#2638c3b837db

...Crude oil (petroleum) of course is the main input to making gasoline, so the price of it accounts for most of the price of gasoline, 50% last year but almost 70% back in 2011. With "OPEC Deal a Fantastic Opportunity to Get Short WTI," gasoline prices could fall further as U.S. crude production is closing in on another record of 11 million b/d.



It's no wonder then that we've seen a very clear connection between the price of crude oil and the price of gasoline . Low oil prices are therefore especially important because they lead to lower gasoline prices, which critically means more disposable income for Americans to spend and expand the economy. Some 75% of U.S. economic growth is built on consumer spending. Gasoline is the classic low elasticity product, where changes in prices have little influence on demand. Yes, electric vehicles and alternative transportation fuels/methods are becoming more important, but gasoline will remain Americans' main fuel to travel for decades to come. In fact, absolute reductions in U.S. gasoline demand have been non-existent....

[thackney]

U.S. Product Supplied of Finished Motor Gasoline (Thousand Barrels)
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M

[Fishrrman]

The "link" between them explained:
Crude oil goes up -- gas prices go up
Crude oil stays the same -- threat of possible crisis, gas prices creep up
Crude oil falls -- gas prices may drop, but never to the point that they reflect the actual price drop of crude

[IsailedawayfromFR]

Nice graph.

It needs to be posted on every gas pump so people will see how little is made by the oil companies and how egregious is the amount collected by the govt, which does nothing to earn it.

[Bigun]

Nice graph.

It needs to be posted on every gas pump so people will see how little is made by the oil companies and how egregious is the amount collected by the govt, which does nothing to earn it.

 

[InHeavenThereIsNoBeer]

It's a pretty simple relationship.

When the price of crude moves, the price of gas goes up.

[thackney]