Oil drops but gas prices go up??

So it seems with Hurricane Ike laying down the smack to Eastern texas in the next few days a strange occurence is happening...

Oil just dipped below $100/barrel today yet the price of gas shot up to almost 5 bux per gallon in some US gas stations as some refineries in texas are shutting down or preparing to shut down in advance of the hurricane. How is this possible if oil prices are declining from their high of $147/barrel in July?

Simple, the supply of gasoline is diminishing with the refinery shut downs. With less gasoline available on the wholesale market, it is driving up the purchase price that retailers are willing to pay. This cost is then passed on to the consumer at the pump.

What I find most interesting is that as the price of oil has decreased almost 30 percent, the price of gasoline has not. WHY? Well, like i've said all summer, the refineries have been CUTTING BACK THEIR PRODUCTION OF GASOLINE in order to maintain a limited supply thereby artificially keeping the price of gasoline higher than it should be.

If you want proof of this, watch how fast the price of gas falls if the refineries are not damaged and the supply of gasoline is quickly restored. The price at the pump will come back down to where it was earlier this week.

But ask yourself, why are you still paying sky high gas prices when oil has fallen so dramatically? If you don't believe me, then I suggest you watch next quarters financial statements by Shell, Mobile, and Exxon. Can anyone say "continued record profits"?


EDIT:

The US basically just nationalized the mortgage industry by taking over freddie mae and fannie mac in order to safeguard the economy. So why not nationalize the Refinery industry? If the plants were run at peak capacity ALL THE TIME, (except for maintence etc) this would lower the price of gasoline at the pump due to the increased supply of gasoline, and it would help the economy due to lower transportation costs for everyone...public and businesses alike!

Originally posted by uzless


The US basically just nationalized the mortgage industry by taking over freddie mae and fannie mac in order to safeguard the economy. So why not nationalize the Refinery industry? If the plants were run at peak capacity ALL THE TIME, (except for maintence etc) this would lower the price of gasoline at the pump due to the increased supply of gasoline, an ...[text shortened]... d help the economy due to lower transportation costs for everyone...public and businesses alike![/b]