Oil and gas
There was a great deal of discussion about the falling price of oil and gasoline, coming as it did in the weeks prior to the mid-term elections. People moderately inclined toward the misguided belief that oil companies have no control over prices, claimed that all of this was just a natural ebb and flow of the uncontrollable free market. While not claiming the fix was in, I certainly offered up abundant evidence that the fix could be in, if there were desire for it to be so.
Let's recall the situation then, which you can see in the graphs to the right. In July, 2006, the spot and futures price of oil was topping $77/bbl and gas was sloshing into tanks for $3+/gal. Oil prices then began a precipitous drop, this being explained away as the natural fall in demand at the end of "driving season." Gas prices likewise began to tilt downward, dropping from over $3/gal to less the $2.25/gal, a decline of 25%.
Shortly after the election, the numbers started to crawl back up the charts, though oil has remained rather stable lately, hovering around the mid-sixties for sometime now. Today, in fact, the Brent spot price dropped 1% to $65.02 and the NYMEX futures price remained at $63.19.
But there's something happening to gas prices that dependence on oil prices does not explain: they are rising. Nationally, gasoline has again topped $3/gal, while oil prices remain stagnant have hovered in the low to mid sixties since January.
Here we are now, with oil prices at $63/bbl and gasoline hitting $3/gal. when nine months ago, $77/bbl was bringing in $3/gal. gasoline. Oil that is almost $15/bbl cheaper is rendering the same $3 gasoline.
Now, tell me again that gasoline prices and oil prices track closely. They don't and there is a lot of wiggle room. There are other reasons for gas price fluctuations and all of those are under the control of the gasoline distributors, i.e. oil companies.