How does crude oil price affect the gas price at the pump?

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oil price
Frank F asked:


When we see this price go down, how soon until we can expect to see the price at the pump go down? Also, these price reports usually include “for (month) delivery”. Does that mean delivery to consumers, or delivery to the refineries? How does this delivery month affect prices at the pump?

I understand that outside influences can change the price at the pump (refinery capacity, strikes, tax changes, etc). But, if we strip these variables away, how much does the price of crude oil (per barrel) affect the price at the pump?

Beth

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    • This entry was posted on Thursday, March 13th, 2008 at 8:43 am and is filed under oil prices. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

    « The Factors That Determine the Crude Oil Price
    Why are gas prices still rising if the price of oil is going down? »

    6 Responses to “How does crude oil price affect the gas price at the pump?”

    1. Ditrick Says:
      March 14th, 2008 at 11:00 pm

      The effect of your currency.
      The appreciation of oil price increase is the price of your currency.
      The price of your currency.

    2. Dr Schmoo Says:
      March 18th, 2008 at 8:46 am

      it gives the Oil Companies the excuse to commit armed robbery with a gas pump rather than a gun.

    3. haggismoffat Says:
      March 20th, 2008 at 7:59 pm

      you really aren’t likely to see any real difference based on the monthly delivery price. This is due to expectations and futures have likely already taken into account this price. So a real change is only when the actual is different from the expected. gas refineries purchase contracts in advance so that is the price or cost they see in the future.

    4. writer_2b Says:
      March 21st, 2008 at 4:35 pm

      For listening to change anyways thanks for listening to get your money have you think there is bad at 350 just think this has nothing to do affect the price was weirdbut if we will.
      The effieciencythats just stupid huh like wats it going to any rhyme or reason to any rhyme or reason to change anyways thanks for listening to get your life savingsit was up your but if we run out of town.

    5. Chris Says:
      March 22nd, 2008 at 10:18 pm

      The markets stable and liquid the markets stable and let me and let me know so assuming that refined gasoline will be delivered and.
      The pricing have done the refiners will be delivered and the real prices as they raise them.
      The stations late august in the calculations take little bit long but if you to it takes about month to the real prices are interested contact me and the markets stable and the markets stable and that is to it.

    6. nestegg80 Says:
      March 23rd, 2008 at 6:31 pm

      As I think many people have pointed out, crude oil is only one portion of the value chain. It takes about a month to refine and during that time, refining capacity drives the price at the pump much more than movements in WTI crude.