How do crude oil prices drop and gas prices go up?

I keep hearing in context of the middle east and in particular Libya, that crude oil prices are dropping for the barrel. I dont understand why gas prices are rising if that’s the case?

5 Responses to “How do crude oil prices drop and gas prices go up?”

  1. SDD Says:

    Where did you get the idea that crude was dropping in price?

  2. Bored Goblin Says:

    middle east and in particular Libya are increasing oil prices, not decreasing them.

    gas price always goes up in spring because people start driving more.

  3. Carl M Says:

    While the price of Gasoline is associated with crude oil it is not ruled by it. First of all it takes a while for the oil to be transported to the US so the gas prices we see at the pump will reflect the cost of crude oil about a month prior. Additionally there are number of chemical processes done to extract gasoline from oil each requiring their own chemicals, as oil resources today are much more crude than before these process require more to get less gasoline. Hydrogen is now being used for the extraction process so if the cost of this gas increases so will your bill at the pump. There are other factors to consider as well, however this should really only be an issue for another decade or so as I am hearing good things about our government supporting alternative energy exploration.

  4. Zeeshan Says:

    Your source of info is wrong. Crude oil prices are increasing due to small cuts in world oil supply but the world market is over estimating the impact of lost oil in Libya. Economic theory suggests that a fall in supply causes prices to raise which explains the gas prices raise.
    You need to check your source on the fall of crude oil as ‘gas’ comes from crude oil so a rise of price of one means costs increase and price must increase by an equal amount to maintain profit.

  5. Vince Says:

    Oil prices aren’t going down. Oil is over $100 a barrel.

    If oil prices went down to $80 barrel, the price of gas would still be high for a month or so. After oil is purchased, it needs to be refine and distributed. When the gasoline that originally was this cheaper oil gets to the gas station, the price of gas will go down.