Oil falls under $69 a barrel!!! that's half of what it was

[HappySqurriel]

Coca-Cola said:

HappySqurriel said:

WiiStation360 said:
Oil prices go up, and it is reflected in the gas price immediately.
Oil price go down, and it is reflected in gas prices weeks to months later.

Oil companies sell gas a the higher of :
- the current cost to produce, based on current oil prices,
- the cost to of the gas when it was produced weeks/months ago.

That is why they make so much money when the oil prices fluctuate so much.

I have never actually seen evidence that oil price increases are traslated into gasoline price increases at a rapid rate; I have seen that oil generally has price increases over long periods of time, people (generally) ignore the price of oil until they start to see gasoline price increases, and then they complain about how quickly higher oil prices traslate into higher gasoline prices even though oil began increasing in price months before gasoline's price increased at the pump.

 

so do you think that the price of gas will fall to $2 by december?

 

 

Crude Oil for November delivery was never at a low enough price to justify $2 per Gallon gasoline so I wouldn't expect gasoline prices to drop to that level until January. Initially, local gas-stations may pocket some of the savings but I suspect by February (if Oil stays at reasonably low levels, and there is no gasoline shortages) you will see $2 gasoline.