Prices falling - except at the pump
Sunday, January 14, 2007
ROY L. WILLIAMSNews staff writer
Crude oil prices have fallen sharply this month, but that hasn't translated into big drops at the gasoline pump - a phenomenon some call "the rocket and feather cycle."
Samford University Business Dean Beck Taylor, who tracked oil prices closely when he worked at Baylor University in Texas, said that's the term analysts use when motorists don't see quick relief when crude prices are plunging.
So far this year, crude oil prices on the New York Mercantile Exchange have fallen 13.2 percent, despite a rise of $1.11 on Friday to $52.99 a barrel.
"Retail prices generally rise in accordance with crude oil prices faster than they fall," Taylor said. "They rocket up and come down slowly like a feather."
The slow fall is the result of wholesalers and retailers attempting to hold onto higher profit margins, Taylor said.
Clay Ingram, spokesman for AAA-Alabama, said he has no idea why motorists haven't benefited more from the sharp decline in crude prices. "The only thing I can figure is that gas companies and retailers figure the current price is something consumers are willing to pay," Ingram said.
The average U.S. price for a gallon of unleaded regular gasoline has slipped 2 percent from $2.33 Jan. 1 to $2.27 on Friday, according to a AAA survey. In Birmingham, prices averaged $2.17 for a gallon of regular unleaded Friday, down 3 cents from a month ago and nearly 9 cents lower than a year ago, according to the AAA. source al.com
ROY L. WILLIAMSNews staff writer
Crude oil prices have fallen sharply this month, but that hasn't translated into big drops at the gasoline pump - a phenomenon some call "the rocket and feather cycle."
Samford University Business Dean Beck Taylor, who tracked oil prices closely when he worked at Baylor University in Texas, said that's the term analysts use when motorists don't see quick relief when crude prices are plunging.
So far this year, crude oil prices on the New York Mercantile Exchange have fallen 13.2 percent, despite a rise of $1.11 on Friday to $52.99 a barrel.
"Retail prices generally rise in accordance with crude oil prices faster than they fall," Taylor said. "They rocket up and come down slowly like a feather."
The slow fall is the result of wholesalers and retailers attempting to hold onto higher profit margins, Taylor said.
Clay Ingram, spokesman for AAA-Alabama, said he has no idea why motorists haven't benefited more from the sharp decline in crude prices. "The only thing I can figure is that gas companies and retailers figure the current price is something consumers are willing to pay," Ingram said.
The average U.S. price for a gallon of unleaded regular gasoline has slipped 2 percent from $2.33 Jan. 1 to $2.27 on Friday, according to a AAA survey. In Birmingham, prices averaged $2.17 for a gallon of regular unleaded Friday, down 3 cents from a month ago and nearly 9 cents lower than a year ago, according to the AAA. source al.com
posted by anthony m, at Sunday, January 14, 2007
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