What drives gasoline prices up or down at the pump? If that question is perplexing to you, or if you see greed at the end of the gasoline hose, you’ll want to attend a program sponsored by WKVI, State Senator Ed Charbonneau, State Representative Nancy Dembowski, and Knox Mayor Rick Chambers.
Scott Imus, Executive Director of the Indiana Petroleum Marketers and Convenience Store Association, will be in Knox Thursday night at 6:30 p.m. at the Knox Community Center to answer your questions on gasoline prices. He’ll also give you his best estimate of where prices are going, and how to prepare for the eventual price.
Imus explained what causes gasoline prices to go up or down.
“The fundamental cause, if you will, behind what a consumer pays at the pump, is what crude oil trades for in the commodity market,” said Imus.
But how much gasoline is used by drivers in the United States does not necessarily determine how much you pay at the pump. So if not consumption, what drives the prices?
“The vast majority of investors today buying crude oil futures are entities that will not want to ever take delivery of crude oil. They’re just buying a piece of paper and hoping that the value goes up by the time they would have to take delivery of crude, and that they can make money on. So you really see a lot of non-traditional users of crude oil in that marketplace, driving up the price really without much justification as to supply and demand,” Imus sad.
Someone who never takes possession of a barrel of crude oil, who only takes possession of a piece of paper, determines what you pay. Also part of the equation is how much gasoline is used outside the United States in places like China and India.
Will we ever see $2.50 a gallon gasoline like we did last year? Imus will try to answer that question, too. If you’re interested in gasoline pricing be at the Knox Community Center this Thursday night at 6:30 p.m. central time. It’s open to the public.