Monday, February 16, 2009

Why Petrol Has Gone Up in Price Though Crude Hasn't

I've noticed that petrol (gasoline) has gone up in price from a low of $A0.99 a litre ($US2.41 a gallon) to around $A1.25 a litre ($US3.04 a gallon) while the US crude oil futures contracts have gone nowhere and neither has the Australian Dollar. Even the Ford dealer tried to distract me by talking about the price of petrol when I complained about the price of Ford parts. Yahoo has an interesting article about the issue, explaining that the price of other varieties of crude oil has risen above that of West Texas Intermediate Crude, which remains depressed. Could this be a sign of economic recovery elsewhere in the world?


Neil said...

It's more likely:

1. A function of overcapcity at Cushing
2. Representative of the fact that WTI is < 2% of crude production

Brent is substantially higher priced (and lower quality) but there is little chance that the UK is starting to recover.

Make My Poverty History said...

I admit I don't really know anything about it, but isn't Alan Kohler on the ABC always saying that Australian petrol prices are affected by the Singapore Tapis index rather than West Texas Crude?

mOOm said...

MMPH: Yes that's true - and the price in other parts of the world is not currently in synch with the WTIC price as much as it usually is.