In America, driving habits probably aren’t as inelastic as they are thought to be. This graphic [source] definitely shows consumers reacting to the oil price hike by cutting down on their driving. This summer given the gas prices is going to be a low-traffic one. We canceled our summer vacation and instead bought a Wii. Will continued rise in oil prices or even stagnation at this level modify our lifestyles and in the long-term create dense and walkable neighborhoods?
June 04, 2008
Have you noticed recently (06-04-08) that the price of sweet crude has dropped $9 since last Wednesday, yet the price of gasoline has risen .15 cents in the same time period?
The price of gasoline is quickly adjusted up when there is an upward movement (no matter how slight) in oil prices, yet when there is a drop in oil prices, the price of gasoline stagnates until there is another increase in oil pricing then we see the viciousness greed of the oil giants at work once again.
June 05, 2008
drsnoflake ,
The lag between gas and crude prices is a likely effect of the processing/storage times in between crude going to gasoline.
You also correctly identified the differences between the upward and downward pressures on the gasoline prices. The Big Picture has some info on this from a few years ago.