Tuesday, February 17, 2009

Crude oil is getting cheaper — so why isn't gas? : Business : Knoxville News Sentinel

The devil is always in the details.

Crude oil is getting cheaper — so why isn't gas? : Business : Knoxville News Sentinel

Crude oil is getting cheaper — so why isn't gas?

By CHRIS KAHN, Associated Press
NEW YORK — Crude oil prices have fallen to new lows for this year. So you’d think gas prices would sink right along with them.

Not so.

On Thursday, for example, crude oil closed just under $34 a barrel, its lowest point for 2009. But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year. On Friday gas went a penny higher.

To drivers once again grimacing as they tank up, it sounds like a conspiracy. But it has more to do with an energy market turned upside-down that has left gas cut off from its usual economic moorings.

The price of gas is indeed tied to oil. It’s just a matter of which oil.

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