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Oil prices have fallen, yet gas is still expensive

If we could enter a time capsule for a very short trip, we would find that in the spring of 2008, speculation in the futures markets had driven the cost of a barrel of oil above $140. And we consumers paid the price – $4 per gallon – for the profiteering that drove that spike in oil prices.

Upon returning to the present, we should be relieved to find that oil trades for a more reasonable $90 per barrel. But, amazingly, we still find gasoline selling at $4 per gallon.

I don’t hold an advanced degree in economics, but it appears as though there might be a connection between the seeming disconnect in the pricing structure and the astronomical profits the oil companies are earning. Perhaps someone can explain it to me.

James Kolbe

Tonawanda