Factors Impacting Gasoline Prices and Areas for Further Study

8/10/01


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Table of Contents

Factors Impacting Gasoline Prices and Areas for Further Study

Different Factors Impact Different Aspects of Gasoline Price

Correlation of Price to Inventory Levels

Crude Prices Strongly Related to OECD.Crude & Product Inventories

Gasoline Prices Also Influenced by Regional Gasoline Product Markets

Tight Product Balance Pushes Up Product Spread (Spot Product – Crude Price)

Retail Price Changes Lag Spot Prices

Cumulative Gasoline Price Pass-through

Illustration of How Lag Effect Dampens and Slows Retail Price Changes from Wholesale

Recent Weekly Retail Price Changes Have Been as Expected

Summary: Most Gasoline Price Movement Can Be Explained As Rational Market Behavior

Author: Joanne Shore

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