High Oil Prices Not Translating Into High Gas Prices

Oil is trading at high levels. WTI Oil hit a new multi-year high in late August and has been over $100 since mid-July. However, despite the relatively high levels in which oil has been trading at, it has not translated over to high gas prices. Gas prices are negative year-over-year and even hit a multi-month low as of late. This is great news for the consumer because it means that there is more disposable income available.

The Charts

Gas Prices are negative year-over-year (YoY)

Gas YoY

 

 

 

 

 

 

 

 

 

 

 

 

 

You are paying about 35 cents LESS today than you were a year ago. (via AAA)

Gas (AAA)

 

 

 

 

 

 

 

 

 

 

We hit a new ~8 month low for the average retail gas price.

Gas (GasBuddy)

 

 

 

 

 

 

 

 

 

 

 

This is all despite elevated levels in WTI Oil ($CL_F)

Gas (WTI)

 

 

 

 

 

 

Part of the reason why gas prices have stayed so low is because Brent Oil ($BNO), which is a better proxy for determining gas prices, has stayed at relatively low levels.

 

GasBrent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This has caused the Brent-WTI spread to remain very low.

GasSpread

 

This has all translated into low Gasoline (actual commodity, not retail) prices. In fact, if RBOB Gasoline ($RB_F) closes below the pennant, it is a major technical break and is potentially setting up for a major selloff. If this gets below ~2.50, we could be seeing a stop all the way to around $2.00.

Gas (RBOB)

 

 

 

Tags: $USO $UGA $CL_F $RB_F $UCO $SCO $NBZ_F $BNO

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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