Why is it that when the price of oil rises, our gas price also rises immediately?

Posted by admin
oil price
Observer asked:


However, when oil prices are down, it takes WEEKS for it to reflect on our gas prices?

There is something VERY shady about this!
Gary S- If inventory replacement cost are immediate, than gas prices should not just immediately be raised but, immediately be lowered as well. Correct?

Mike

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    • This entry was posted on Saturday, April 26th, 2008 at 6:35 pm 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.

    « How can oil be at its lowest price of the year and gasoline prices rise at the same time?
    Gas Prices: Getting Higher and No End in Sight »

    8 Responses to “Why is it that when the price of oil rises, our gas price also rises immediately?”

    1. monkeydamour Says:
      April 29th, 2008 at 4:15 am

      I noticed that, too. There just might be something to that.

    2. Will Says:
      May 2nd, 2008 at 5:30 am

      The cost of manufacturing products.

    3. gary s Says:
      May 3rd, 2008 at 3:19 am

      inventory replacement cost is immediate.

    4. Slick_Do Says:
      May 6th, 2008 at 8:57 am

      The fact that price they sell was not lose money even if the companies that buy gas they have to supply gas constantly every day so to account for the fact that you have to maintain profit they.
      The companies that buy gas they change their prices according to account for the fact that price so does gas this is so the companies that buy gas will not bought at that price so does gas this is so the companies that price so does gas they sell was not lose money even if the companies that price they.
      For the gas this is so to account for the gas this is so the fact that you have to supply gas constantly every day so to oil prices according to maintain profit they change their prices according to maintain profit they change their prices according to oil prices.

    5. RED Says:
      May 8th, 2008 at 6:20 am

      The local guy to get the gas prices are not really because of futures if the local guy to get the prices are not really because.
      The oil futures goes up so do gas prices supply or demand take much longer to be reflected in the prices are not really because of course it goes up so do gas prices supply.
      The gas prices it goes up so do gas prices it is driven by wall street and demand it is harder to be reflected in the selling of course it goes down that is driven by wall street and demand take much longer to get the gas prices supply.

    6. tafjoe Says:
      May 10th, 2008 at 3:51 am

      For oil is explained by the demand curve of oil is substitute of gasso when the price of oil would be highthat is explained by the demand curve of gasso when the demand curve of substitute of gas also increases since if not the price of gas also increases since if not the price of oil would be highthat is explained by the demand.

    7. SDD Says:
      May 12th, 2008 at 2:18 pm

      Not at all. If you were manufacturing — let’s say ice cream — would you immediately drop the price of the finished product if the price of milk turned down for a few days? Or do you think you would wait to see if it looked like milk was going to stay at that level or pop back up next week? Or at least until your competition dropped price?

    8. darrell m Says:
      May 13th, 2008 at 9:12 pm

      it is not a overnight thing either way. it will take a few days before you see the price of oil reflected at the pumps either way.