Why oil is down, but gas is up

Today's Atlanta Journal-Constitution had an informative article on the current imbalance in the direction of oil and gas prices:

The benchmark price, for the best crude, is down. Ironically, that oil is the least available.

Crude oil prices have fallen to new lows for this year. So you’d think gas prices would sink right along with them.

Not so.

On Thursday, for example, crude oil closed just under $34 a barrel, its lowest point for 2009. But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year.

On Friday gas went a penny higher.

The average gas price in metro Atlanta jumped 8 cents a gallon in the past week and 20 cents in the past month.

Sunday’s average was $1.86 a gallon, according to atlantagasprices.com, which tracks prices based on motorist reports.

To drivers once again grimacing as they tank up, it sounds like a conspiracy. But it has more to do with an energy market turned upside-down that has left gas cut off from its usual economic moorings.

The price of gas is indeed tied to oil. It’s just a matter of which oil.

Read the whole thing.