Oil Pricing

One of the things that has always puzzles me is the correlation between the price oil is trading on the markets and the price we pay at the pump, I guess what I am thinking is that there really isn't any.

Today oil is trading at $87 a barrel, it has continued to slide in price over the last few months, however we have seen no real slide in price at the pumps. In fact we are paying a fair bit more now at the pump than when oil was last at $87 a barrel. It makes me think that if I was in the oil business it is a real slick (pardon the pun) way to increase profits, you increase the price at the pump when the price per barrel goes up, but never return it to the lower price when the price per barrel drops, each time this happens you are able to increase your profit.

As I think about it at the beginning of the summer we were told that the price at the pump wasn't dropping even though the price per barrel was dropping because the summer meant peak demand for gas meaning a higher price at the pump, now summer is over and we've heard so much about the lack of travel by people this summer that should mean a significant drop in price at the pump especially given the continued drop in price per barrel of oil, I guess we will see...