Watching the crude oil prices fall and seeing the gas pump prices ease down…might leave consumers wondering if the crude prices and the pump prices will have the same relationship they had when crude oil prices were previously low.
The answer seems to be yes—but you might not find that answer by comparing pump prices with oil futures prices, at least not right away. Crude fell to about 115 dollars Friday, down from 147-dollars last month.
Mike Right with the Auto Club of Missouri says pump prices won’t fall as fast as the futures prices, though, because some of the gasoline being made today is being made from oil that was purchased at that higher crude price.
He thinks the crude versus pump price will match the April numbers if crude prices stay down long enough for the cheaper crude to flow into refineries.
So, he says, wholesale gas prices are a better indicator. Crude was at 115-dollars a barrel on Aril 17th, when the wholesale price of gas was 2-95 a gallon. Last Thursday, the last day for which Right had figures, crude was 120-dollars and wholesale gas was 3-dollars—pretty comparable.
Now here’s the lag factor. The retail price in April was 3-26 a gallon when crude was 115-dollars a barrel. A check on Friday showed pump prices ranging from 3-35 to 3-79—but Right says the today’s prices might keep sinking if crude prices stay down.