Hey folks,
If you’ve been watching oil prices lately, you may have noticed something strange.
Crude has taken a major hit — we’re talking a drop from nearly $80 down into the mid-50s at one point — but the price of gas at the pump hasn’t followed suit.
So what gives?
The reasons might surprise you…
First, refinery draws have been putting a squeeze on gasoline supplies.
The latest petroleum status reports show that while crude oil inventories have swung from surplus to deficit, gasoline stockpiles are staying tight. That imbalance helps keep gas prices sticky.
Second, there’s the ethanol factor: That’s the push I talked about last week toward E15, a fuel blend that uses 15% ethanol
It’s partly about emissions, sure.
But it’s also a practical workaround. By boosting ethanol content in gasoline, suppliers can stretch limited gasoline inventories further. It’s a subtle way of addressing the problem without increasing oil production.
Third, there’s seasonal demand.
We’re heading into the summer driving season, when gas prices naturally rise.
Throw in regional differences (it’s still over $6 in parts of California) and the fact that gasoline is more directly affected by refining and distribution issues than oil itself… and you’ve got a recipe for high prices, even in the face of falling crude.
It’s frustrating, I know.
But it’s also a great example of how markets don’t always move the way you’d expect — especially when multiple forces are pulling in different directions.
I just covered this and more in my free bi-weekly Market Radar session.
Watch the full episode here!
And don’t forget to register your spot to be notified every time I’m going live.
Stay sharp,
—Geof
P.S. A $514 BILLION Cliff is Coming… and this asset could surge!
