Price of oil falls - why are gas prices so high?

(CBS News) 

ATLANTA - Oil has been falling recently - and gas prices, too. But not nearly as rapidly.

The price of oil closed Monday at about $84 a barrel. That's up nearly $2 from Friday. Gasoline is down two cents in the past week to a nationwide average of $3.58 a gallon.

Odetta Muhammad's a single mom, a registered nurse and a frustrated commuter. CBS News transportation correspondent Mark Strassmann reports she spends $80 a week driving 70 miles a day.

AAA's Fuel Gauge Report

Between oil companies and convenience stores, Muhammad doesn't think she's getting the best possible deal.

"No of course not," she said. "Don't quite understand the phenomenon when the gas prices in barrels is going down and yet the gas prices are still going up. Sounds like a profit type margin, gas race."

Often the price of crude oil and gasoline rise together. But gasoline usually lags behind crude as prices fall. The price of U.S.-produced crude oil has dropped 30 percent since May. But gas prices have only fallen 11 percent.

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Compare that to 2008, when oil prices fell 77 percent and gasoline dropped 61 percent.

"As gas prices rise, as increases happen, stores are more apt to maybe absorb some of those price increases during a rise," said AAA's Avery Ash. "Then, as prices fall, they may be inclined to lag a little to make up for some of these losses."

Another important factor is the higher price of imported oil. Half of the oil America now uses is the more expensive crude produced overseas.

Muhammad says she feels that every day, "along with everybody else."

It could be a while until there's relief. Gas prices should drop another 40 cents by Christmas.

[JPWhite]

This article was very insightful. It's not just the normal 'gas price lag'. Starting in August of 2011 the price of gas and price of oil de-coupled drastically.

Check out the charts at my blog.

http://wp.me/p1sK3k-8d

As for the lady spending $80 per week on Gas. That's $320+ per month. For $350 per month she can lease a LEAF or Volt and insulate herself from gas price hikes forever. Dump that SUV!

[reeniewhalen]

you can say byebye to low low gas prices. its obvious people are now so reluctant to pay the price as it is now so why should they lower the price?
If you want gas prices to drop, don be so reliant on your car. Take a bus, cab or train to/from work. The less money these oil companies take in gas consumption, WILL drop the price.
Until then, stop moaning about the price. You only have yourselves to blame!

[donretired]

GREED GREED Get every penny you can from the public.

[pwgrant]

I am up to 50 miles a week on a bicycle. When I top 100 miles a week, I am selling one of my cars. Effectively, cutting my gas consumption in appox. half. Training my kids to do the same. Lifestyle changes and such, if I ever find myself moving into a big city again, I will move close enough to work to pedal. SCREW YOU OIL COMPANIES! One more bike, one less car - more monies for other things!

[Dgunner]

THis american IN YOUR FACE and we take it with a smile . Until american citizens work together and boycott like we did in the 70s the speculators and the super rich will continue to bend us over. We fight on foreign soil together for one cause but here at home in the good old USA the average citizen can't or won't display ant guts towards thier enemy .Until we organize and boycott on a national level QUIT your BITYCHING and keep your wallet open and be a good litle tax payer and shut your f---ing mouth and get back in line!

[gbgentleman]

There is a difference this time. The Chinese economy is increasing enough to take up the slack in oil consumption. We NEED to not only stop using oil, but quit buying chinese good as well. We need to support American business (smaller companies preferable).

[tarateacher35]

Thanks to the folks at www.gasenvy.com my price is still at 3.11 and can't go higher for another 6 months. I've received monthly reimbursements sent directly to my checking account up to $85 over the past 4 months. Great idea for someone living on a budget similar to mine!

[amerilatino]

There's one word to explain the roller coaster pricing of gas, SPECULATION. When greedy speculators focus on an attractive commodity they buy it up, driving up the price in a sort of self-fulfilling prophesy that does not necessarily obey the consumer-driven laws of supply and demand and provides no real added value to the end consumer. It happened during the Gold Rush, the late 1920s and the real estate bubble. It has allowed cartels to drive up the price of food in poor countries and it has made economies collapse when those same speculators chickened out of their artificial swelling of value and make runs on the markets. That is why we had energy commodities regulation until that intellectual, selfless gem, G.W. Bush and his energy commodities broker base had it repealed, thank you very much. If you don't believe that, read up on the Bush family curriculum vitae, if you still don't believe it, you must believe in the Batboy and that we never went to the moon.

[rocketjl]

Please. Work a little harder to come up with a better lie that sounds like it could be true. We are really tired of hearing this one for 30 yrs. Gas prices went up at lunch, because oil went up this morning. I know oil has been dropping all week, but it takes time to work through the system and result in a drop in price at the pumps. All politicians and media people really that stupid???????

[RedDeath50]

"she spends $80 a week driving 70 miles a day."

===================================================

Let's look at these numbers. Using the average price mentioned in the article ($3.58/gallon,) that works out to 22.35 gallons. The article also states she commutes 70 miles a day, which equals 350 miles a week. That works out to 15.66 miles per gallon.

While I agree the overall problem is price gouging, instead of whining about the price, perhaps this woman should trade in her gas guzzler for a more efficient vehicle!

[pwgrant]

Maybe JUST maybe, she can't afford to sell/trade for a more efficient car. Simplistic comments like this are usually made by people with finances that are not affect largely by gas prices. Trading a car for higher gas mileage is one of the worst things a person can do. The only thing worse is (for an individual to) buying a car for the investment and thinking about trade value. New car payments far exceed ANY saving in mileage or trade in value. THIS from numerous economists.

Fortunately, you agree that it is price gouging/fixing; oure and simple.

[AmazingGrce]

You can sure tell who on these boards are connected or invested in oil companies including Avery Ash.

Since oil prices started climibing gas prices have ALWAY gone up just as fast as oil prices. So this tripe about dealers absorbing the price increase is just about as smelly as the ultra huge profits being enjoyed by the oil companies.

They never miss an opportunity to stick it to the consumer for a little more profit. Keep in mind that the oil prices that increase are only for oil not yet in the hands of the refinery. That means you are paying for the oil prices before it becomes that gas you put in your tank. Do they really expect us to believe that the oil company is charging them more for the gas they already purchase from the wholesalers?

We are being ripped off day after day.

And our politicians just keep raking in the donations from big oil to keep their campaign coffers filled while they stall and kill any legislation to protect consumers.

Do you know who paid for 'your' Senator or Rep?

[zenia5]

Great logical and true post. Not only are we being "raped" at the pumps, but our hard-earned tax dollars are still subsidizing the five largest oil companies...billions of dollars per year....thanks to the Republicans who recently voted UNANIMOUSLY to continue these subsidies despite Democratic efforts to stop them.