I can’t figure this out. With crude oil prices almost at a record-high $50/barrel, you’d think gasoline prices would be shooting up, too. But they’re not. In fact, the price of gasoline remains at historically low levels, when adjusted for inflation. (See graph of gas prices).
The Big Picture explains that gas prices typically lag behind crude oil prices by 3-6 months, so our prices may still reflect the low $30/barrel crude prices from May. But look at these charts of crude oil and gasoline prices. Crude is still going up … but gas is going back down.
Could this have anything to do with the upcoming election? After all, a sharp rise in gasoline prices would make many people doubt that the economy is doing well. And the president is nothing if not a very good friend of the oil industry.
That may play a role, as does the lag effect — but my understanding is that limited domestic refining capacity is what drove the price increases earlier this year, moreso than crude prices…