When the media reports oil price in the US, they use the price for WTI deliveried to Cushing, OK. That is done because it is the basis for the NYSE commodities oil price for next month.
Cushing is having a surplus of oil due to larger domestic production around the Permian basin and some other factors. Where the WTI price has normally been a premium to our imported oil price, it is now trading at a discount.
But that doesn't change the fact that most of the oil we use in the US is imported. So most of our Gasoline is from the higher priced oil than that quoted in the media.
If you look at the following two source of data you can see this switch. The latest average cost of domestic oil is a few dollars cheaper than our average imported price. Back in July of 2008 the imported price was several dollars less.
U.S. Crude Oil Domestic Acquisition Cost by Refiners
http://eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=R1200____3&f=M
U.S. Crude Oil Imported Acquisition Cost by Refiners
http://eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=R1300____3&f=M
So the price of oil that is quoted by the media represents a minority of the oil that is actually processed in this county. And since 2008, the ratio of domestic oil versus imported oil has raised which compounds that difference.
? Uh ?
I looked at those charts and don’t understand what you are trying to teach me. The first chart has the same price as I quoted in my post for 2008. $137
The second chart is slightly lower, but the price in time is still higher than today’s price. $127
And the gas prices are still higher in comparison to 2008. So I am not seeing where your explanation substantiates today’s price on gas?