One thing I have observed: when oil supplies get scarce, petroleum product prices go up. When oil gets more plentiful, these prices STAY up, at least for quite a while. It sounds like there is a max() function in there somewhere.
One thing I have observed: when oil supplies get scarce, petroleum product prices go up. When oil gets more plentiful, these prices STAY up, at least for quite a while.
In 1998, I recall buying gas in California for less than a dollar a gallon. I would wager they were selling at a loss. Merchants sell below costs all the time for a lot different reasons. If costs fall they may have to sell below what they bought it for to meet competitor's prices. They will need the money so they can replenish stocks at the new, lower costs.
If demand falls, merchants have price wars until good times recover or until one is forced out of business.