Gasoline prices have dropped for the short term because the EIA inventory report for gasoline showed an increase of 3.3 million barrels. However the report for oil showed decrease of 5.9 million barrels.
Most don’t understand that gasoline and oil prices don’t increase in lock step as there are many factors that effect each separately.
The fact is that the inventory for oil has been decreasing fairly steadily for several months now and is well below the 5 year average. This is a indication that the glut of oil that had depressed oil prices is gone and the oil price has been increasing in response to that.
I am in the oil business and therefore follow the inventory reports and other factors very closely while most only pay attention to gasoline prices because that is what effects their pocketbook.
Fact: The price of oil jumped 5% Friday on the report of the OPEC meeting. Expect the price of gasoline to follow suit eventually.
I don’t doubt your expertise merely telling of the experience of seeing lower prices to my surprise. Typically prices go up slowly a couple of a cents at a time so this rather deep drop was so surprizing.
There are many who rationally bet the market will do the rational (or theoretically appropriate) thing and they are now wishing they had gone the other way.