Quote:
Originally Posted by Matt Herring
id like to hear an explanation for the current cost of gas at the pump. imo it starts at the source of the oil...and a barrel that costs the same amount to refine as it did a year ago or 2 years ago ends up being $2 or $3 more now.
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Here's a simple explanation.... It's in your head.
Here's why
1 Year
1 year ago, 1 barrel of light crude for October was a tad under $90.
1 year ago (to the day), 1 gallon of regular fuel, according to AAA, was $2.849.
Today, 1 barrel is trading ~$65 - today's average is $2.668 and falling (according to AAA).
Two Years ago....
1 barrel of oil was ~$60
1 gallons of fuel was about $2.15 (gasbuddy historical charts)
To note about two years ago.... There was a large selloff in the fall of 2006. Traders thought there would be another Katrina -like event that would drive prices up as refineries went offline as they did during/after Katrina. It became obvious that wasn't going to happen, and a lot of people unloaded, crude and fuel fell more than the usual end of summer trend.
Inflation Adjusted
~$60 in 2006 dollars = ~$63 in 2008
$2.15 in 2006 dollars = $2.28
Three years ago
1 barrel was ~59 (~$63 adjusted for inflation)
1 gallon of gasoline was about $2.45 ($2.68 inflation adjusted)
A quick read at the charts... The very last time oil was at $65/ barrel (not inflation adjusted) was about 7/2007.... And gasoline was about $2.95 (maybe a little less, the chart line is thick
). If someone could explain why we paid a little more more a year ago at the same prices, I'd appreciate it
Sources
http://www.fuelgaugereport.com/
Gas Price Historical Price Charts - GasBuddy.com
Tom's Inflation Calculator
I'm going to say this clearly. I am not defending anyone, any organization, any company...
I'm just tired of hearing complaints like this (cost of barrel versus fuel cost). Don't take it personal, you're neither the first or last person
However the barrel gets to whatever price it is - we're still paying out the ass fairly consistently within a reasonable tolerance (not enough to call shenanigans). IF we really were paying $2-$3 more now than we were two years ago... That would mean I was paying $0.50 to -$0.50 per gallon of gas two years ago... I clearly remember that wasn't the case
People have these hunches in their guts because their tired of paying so much (I don't blame them) - but these are gut feelings, so all evidence points to supporting that feeling regardless of merit :/
Feel free to poke holes, but as common courtesy, I ask whomever is responding cites sources
