Right now, West Texas Intermediate is going for $14.16 a barrel. A year ago, it was almost $62.
So why is gas still more than $1.65 a gallon?
I understand that the product cost of sales is not the only variable. There’s transportation and overhead, salaries and equipment costs, but still. Last week the future price of a barrel of oil drifted into negative territory. Producers were paying $40 a barrel for distributors to take it off their hands.
Wouldn’t it make sense for those oil producers to cut the price of a gallon of gas to the bone, to encourage consumption?
With the Coronavirus quarantine, driving around might be an attractive alternative to staying home.
Back in the old days, if gas got cheap enough, I might spin up a fatty, load a six into an ice chest, and drive the loop.
If gas drifts below a buck a gallon, I’ll still do it. Just for old time’s sake.
Now, they will deliberately cut production, and that will ‘justify’ – at least in their greedy little minds – a continued high price at the pumps. There’ll be no break for us.
They’re going to start capping wells because there’s no storage capacity. The world is changing, and it’s not going to be pretty.