Price Of Oil Versus Price Of Gasoline

By: Disciplined Approach to Investing Saturday, December 06, 2008 1:05 PM

Article Author

Bio and Articles
Author's Website

Vote for next session

The next market session will close:

Yesterday, WTI spot crude closed at $40.81 per barrel. By simply looking at pump prices, it is evident that gasoline prices of fallen dramatically along with crude. So how much lower could pump prices decline based on the per barrel price of crude?

(click to enlarge)

Source: Energy Information Administration

The above chart graphs oil prices along with gasoline prices. In January 2002, the per barrel price of crude was around $20 per barrel. At the same time, the average price of a gallon of gasoline was around $1.15 per gallon. Given the high correlation of pump prices to oil prices, it seems possible that near $1.00 per gallon of gasoline is a possibility. This decline in gasoline prices is equivalent to over $300 billion in tax cuts.

Bookmark:
Email
Print

The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.

Related Stories