Oil is off $24 from its high, but only about a dime at the pump.
When it increases by $10, the stations increase the price about 4x a day!
That is how these little Mom & Pops make money and to some degree the larger chains. The drop in crude won’t translate to lower prices at the pump until late Aug. or early Sept.
What is really bogus about this article is that Reuters is trying to really push the “lower demand” angle. It just so happens that the decline in crude began when Bush repealed the ban on drilling. I suppose it was just a coincidence. The media really are the enemy. :)
Notice most of the stuff that’s falling is August deliveries. Your station is still selling stuff it bought at significantly higher prices which they’re not going to sell at a loss just because they won’t need all that money to buy next month’s stock. When the price of oil goes up though they need to make sure they have the money to buy it, which means the price of what they have on hand goes up.
Actually, when oil prices went from $60 to $145 a barrel, a 240% increase, gas prices only went from $2.20 to $4.00, or about a 1805 increase.
$4.00 gasoline was about the limit, and the refineries and service stations just couldn’t raise the price any more without tanking the market. Too many of them were willing to hold that line.