Why is gas going up as oil goes down? on clarkhoward.com

Have you noticed that the price of a gallon of gas is going up while the price of a barrel of oil is going down?

At last trade, a barrel of oil was going for around $35. Compare that to last summer when it was $147! Meanwhile, some industry insiders are tentatively predicting that gas will rise to $2.50 by spring. But they've been mistaken before and could be again…

The issue of supply and demand, of course, comes into play. The middle man in this case -- the refineries -- are reducing their production levels in an effort to increase their profits.

But the reality is that this is a temporary phenomenon and it will fade.

Ultimately, what we pay for gas is controlled by the price of a barrel of oil. So it's only a matter of time before you can reap the benefit of the seemingly bottomless cost of oil directly at the pump.

Watch video of Clark predicting the cost of a gallon of gas on May 1, 2009 -- back in April 2008!

What others are saying

oil slickers
no matter what the spin on the subject, the big oil companies will refuse to acknowledge any wrongdoing or any culpability in their criminal approach to price fixing... their laughable explanations spouted by paid mouths of the industry is only trumped by the assinine reporting that refuses to look beyond the smear of black oil rubbed on their backsides ... the cowardice of both the big oil men and free press is matched only by the haze of effluence blasted by the governments of the oil producing nations where they claim no irregularities have ever been found.
By rod @ 05/18/09 12:58:33 PMreport abuse
Gas
Colorado Gas has been going up then going down
By Brittany @ 04/08/09 01:15:02 PMreport abuse
gas here going down
I'm not sure what time frame you're referring to, Clark, but here in mid-Michigan gas has been steadily creeping down again
$1.90...
$1.80...
$1.70...
$1.60...
now under $1.60 per gallon.
By DB Cooper @ 02/25/09 07:38:58 PMreport abuse
rising price of oil
hi, i used to pay $110 a month for gas , but with that crazyu increase to $4 and more a gallon i began to carpool. i now pay 75 a month instead of what i would have at over 400 a month.i plan to keep carpooling for as long as i hold a job in my lifetime. carpooling save on gas and wear and tear on the vehicle. we have enterprise and it works good so far. i am saving now about $250 a month since i travel an hour to work each way. the higher gas goes the more i save so let the gas go up. the economy will have to shift and prices for other things will adjust.
By james @ 02/25/09 01:03:39 PMreport abuse
greedy oil companies
The big oil companies are not earning record profits off of oil, so they reduce refinery output to make the profits off of gas. They have to try and match their record profits of last year for any company EVER, or the stockholders will cry...they will use the upcoming busy summer driving season and any other pessimistic reasons they can think of to drive the price of gas and oil up. when the truth is if they had refinery production wide open we would have close to $1 gas at the pumps.
Even when demand is drastically reduced at the pump (as it was with $4 a gal gas) they just cut back production, so your supply and demand model will never work....with government regulating and bailing out everyone they need to keep an eye on the big oil companies who, along with speculators, artificially inflated the price of oil and gas to record prices at the consumers expense...yes the financial markets were troubled, but i believe the oil and gas price gouging last year was the straw that broke the camels back. It drove up retail prices on many things including food...and when gas and food cost more the average american can feel a recession. They need to regulate the oil futures market and keep oil comapnies from hindering supply for their own profits!
By Dave @ 02/25/09 12:35:04 PMreport abuse
Price of a Barrell vs Price at the pump
Mr. Howard, you're so very close. But, the reality of it is that the price that we hear on the news is for Texas Crude (I forget if its the sweet or not) and the price at the pump is from where ever the gas comes from. For example if your local gas station has gas form Saudi Arabi the nthe price will be higher because that barrell is trading higher than the Texas crude.
By Wayne @ 02/25/09 09:34:04 AMreport abuse

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Feb 24, 2009 -- Why is gas going up as oil goes down?

What others are saying