Crude Oil peaked at $147.27 per barrel on July 11 and gas prices were averaging $4.11 per gallon. Today the price per barrel is averaging at $2.95 with crude oil at about $75 dollars per gallon. Shouldnt our gas prices be at about $2.05 per gallon or is there something I am missing?Why are gas prices high compared to crude oil?
Greed, lack of morality, and good old profit maximization by the oil companies.Why are gas prices high compared to crude oil?
Ultimately, the price at the pump really depends on the law of supply and demand and on the area of the country and the taxes levied by state governments. When people buy crude oil by the barrel, they are really bidding to buy a contract where they agree to purchase a certain number of barrels (e.g. 10,000 barrels) at a certain price to be delivered at a certain date. So speculators in July thought demand would be high in the fall so they bought contracts at that price for September delivery. But again, many factors ultimately determine the actual price.
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