Gasoline and crude oil price trends have diverged

Hmmmm... I'm not exactly sure what to make of this, but I noticed that gasoline prices have recently been trending down even as the price of crude oil has been trending up. This has been happening for about a month now. Usually they trend in the same direction other than for a short intervals when the trend is changing. The rise in the price of crude is most likely due to anxiety over Iran and its over-touted "nuclear ambitions", while the decline in gasoline is either due to an actual decline in real, final demand or an excess in supply or due to speculators shifting their bullish bets to cash or elsewhere. I suppose it is also possible that the turmoil at MF Global is confusing the markets.

 

In any case, the decline in the price of gasoline is good news for consumers and consumer spending going into the holiday season.

 

The concern is whether the recent rise in the price of crude from $75 to almost $100 may ultimately show up as higher gasoline prices over the next month or whether it is just a short-term speculative pop that may reverse just as quickly as it appeared.

-- Jack Krupansky