Submitted by robric18 t3_z6916m in explainlikeimfive
WeDriftEternal t1_iy00zja wrote
Gas generally is aligned directionally with the price of oil. If oil goes up, gas goes up, if oil goes down gas goes.
If people think the price of oil is increasing, they will say that gas may go up. They may be wrong, maybe oil goes down, or no change, but they can still say it. Saying "gas will go up" means nothing until it actually does, and unless you're putting your money where your mouth is, there's no penalty for being wrong. They absolutely do not ALWAYS get it right. But economists and traders know the patterns and roughly what to expect. Your local radio etc. isn't making their own predictions, they probably just look at what someone else is saying.
Example: Gas is going up tomorrow.
For oil, there's a lot of metrics, such as worldwide oil production, that are very good indicators of the direction oil is trending, so people look to those when they think about what the price will be in the near term.
nayhem_jr t1_iy1y5md wrote
Some other causes of gas price changes:
- Refineries undergoing routine maintenance
- California in particular requires a lower-emission gas blend for summer months that is more expensive to produce
- Shipping/logistics issues (tankers, ports, oil transmission)
7th_Level_of_Hell t1_iy2jxt9 wrote
>. If oil goes up, gas goes up, if oil goes down gas goes.
Gas goes down at a slower rate* ;)
WeDriftEternal t1_iy2k338 wrote
Yup. That’s why I said it’s directional, not proportional
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