The crude oil is rising but the gas prices in the pumps are falling – how is that possible- what is in store in the next two months?
Peter Oberois
Jul. 3, 2007

The crude oil prices rising on a daily basis. It closed today above $71 barrel. Have you watched closely the gas prices in the pumps? They are steady and falling slightly.

How can that be possible. Here is what is happening behind the scene.

The companies that buy crude oil and make the gasoline (distillers) are creating a huge supply of gas. In order to that they need a lot more crude oil that the crude oil wholesalers expected. It takes months for crude get shipped from Middle East and reach US. So the excess demand from the distillers is taking the crude prices higher. At the same time the gasoline supply in the pumps is abundant and that is taking the gas prices lower.

What will happen during the next two months?

The gas prices will continue to fall or stay the same but the crude oil price will rise sharply making a possible new high. But the crude oil will not sustain that height. Ot will slowly and steadily come down to high 60s level again.

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