Oil Prices drop to $115 a barrel, and thank goodness the dollar finally starts to rebound,
All the reasons we were told gas sky rocketed have reversed, Right!
But U.S. average gas price still 3.88 a gallon.
So, this wasn’t all that easy to find, but I had to know. When oil was at $115 a barrel before, what was the price of gas.
I’m going to guess you probably don’t want to hear this, but here goes.
Headline April 22nd Oil prices hit $122 a barrel from $113. How quickly did gas prices respond?
Gas prices at the time rise from $3.39 to $3.51. So naturally we are asking how is it that
A. we are paying $3.88 almost 50 cents more per gallon
Or B. The price can adjust up double digits in a week on a oil increase. Yet we see oil go down twice that much and get a few cents off.
An even scarier statistic:
1979 oil prices spiked to $106 a barrel adjusted for inflation.
Do you want to know the scary truth about what the price of gas was back then 1979…$2.20 again adjusted for inflation.
When oil prices go up it’s FIFO first in first out, meaning if I have to pay more for the oil I’m buying to refine, that means the oil I already have is worth more.
But, if oil prices go down then it’s LIFO last in first out the oil I still have in inventory to refine cost me $147 a barrel. And based on the correlation from oil price to gas price from 1979 somewhere along the way it will still holds just a little more profit and never come back down all the way.
You might be saying the Oil Companies can’t have it both ways.
But oh yes they do and there is nothing we can do about it.
Now that the oil companies have taught us to get used to gas prices over $3.00
Now that the oil companies have taught us to get used to gas prices over $3.00
