How Can You Predict Futures Prices for Gasoline?


Quick Answer

Gasoline vendors set retail prices based in part on crude oil futures, the vendors' current inventories and the vendors' access to national inventories. Though there is often a delay due to refining and shipping times, patterns in gasoline price fluctuations follow those of crude oil prices.

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Full Answer

If prices are viewed as a line graph over a period of time longer than three months, the curve for gasoline prices and futures prices is usually slightly less volatile than that of crude oil prices and futures. This is due to the delay in refining and shipping times as well as additional static costs for labor and capital within the gasoline production process. Thus, the curves of both products look similar in shape, but the gasoline curve has less pronounced peaks and valleys.

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