But following the rule-of-thumb, the average price should be about $3.80 a gallon. Earlier this year the price of gasoline fell significantly below where the rule says it should be and it’s now in the process of catching up.
The glut of crude oil at Cushing offers no help because it cannot yet flow easily to the Gulf Coast to moderate the cost of Brent. For gasoline prices to fall, Brent prices need to fall and that is not likely to happen any time soon.
Brent trades today at just over $118 a barrel, a premium of more than $21 a barrel to WTI, and that gap, which fell to around $16 a barrel earlier this year is widening again, with Brent rising more quickly. Not a happy scenario for U.S. consumers.
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