Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  Are Gas Prices Too High?
Supporting Image for Blog Post

Lately, we have been getting frequent questions about why gas prices seem to have risen more than crude oil prices.  Some people believe that refiners are taking advantage of the marketplace and pushing gas prices past the normal spread.  But, the data says this is not the case.

The chart above divides the wholesale price of unleaded gasoline by the front month light sweet oil futures price.  Wholesale prices help avoid any wider spread caused by higher sales taxes imposed by states or municipalities. 

Clearly, we could make any case we want from this data.  If we start in early 2004, then the price of gasoline is "low" today relative to the past.  But, if we start in early 2008, when oil prices were spiking to all-time highs, the price of gas looks "high."  In the end, the appropriate thing to do is look at the 10-year average.  The bottom-line:  Current gas prices relative to oil prices, at least through April, were well within the norm of the past decade. 
Posted on Monday, May 16, 2011 @ 3:00 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.