If it feels like your wallet is finally getting a taste of that cheap oil that has been unsettling the market for weeks now, you're right.
WTI crude oil was down to a little under $30 a barrel earlier this week from the recent peak in the summer of 2014, or about $1.85 on a per-gallon basis. At the same time, data from the Energy Information Administration show that the average price of gasoline is down about the same amount to $1.90. That means the savings from the world's massive oversupply of crude are making their way into American gas tanks.
Now, you may think that's just fine and natural. But in reality, the changing price of gasoline seldom lines up exactly with the changing price of the raw materials that make up about half the cost.
Studies show that when oil rises, gas goes right up along with it, but when oil prices fall, it tends to take a little longer for gas prices to adjust. In those opportune periods all the companies between the oil producer and consumer take a piece of the savings if they can.
We saw it last summer — a gallon of oil fell until it was $1.30 cheaper, but gasoline dropped only about 89 cents. In August, the gap between the price of oil and the price of gasoline was $1.70, the largest it's been since the EIA started keeping track.