Donger on Suicide Watch: Oil Nears $100 a Barrel

[Hydrae]

Originally Posted by Donger

Because retail prices drop more slowly than they increase. Think of it this way:

When gasoline prices are dropping in response to crude dropping, the retailer is still selling gasoline that he bought when crude was higher. So, in order to not lose too much money on the inventory he has in his tanks, he drops his prices as slowly as possible.

Make sense?

It would if the arguement for it going up as soon as the crude price goes up wasn't so that they can afford the next load. So the price goes up immediately to cover the next shipment but the price stays up to pay for what they have in the tank already.