Verify: Why cheap oil doesn't always mean cheap gas

VERIFY – YOU’VE GOT QUESTIONS, WE’LL FIND ANSWERS

A 9NEWS project to make sure what you’ve heard is true, accurate, verified. Want us to verify something for you? Email verify@9news.com

THE QUESTION

A 9NEWS viewer named Ted emailed us to ask about the price of a gallon of gasoline in Colorado.

“The price of a barrel of oil is down $12.00 over the last 2 months … ,” Ted wrote in his email. “Why has Colorado received no relief at the gas pump?”

WHAT WE FOUND

The first two things we verified was whether the price of a barrel of oil has dropped $12 in the past two months and whether that’s a big deal.

A chart from NASDAQ, the American stock exchange, shows the price dropped about $11 since late April and about $9 since late May.

A quick Internet search turned up dozens of articles about falling oil prices, including one from Reuters that says the drop in prices since the beginning of 2017 is the biggest in 20 years.

It's a significant drop.

So, what’s happening to the price drivers pay at the pump in Colorado?

For those answers, the Verify team called Patrick DeHann, a senior petroleum analyst at GasBuddy.

The price of a gallon of gas in the Centennial State dropped eight cents in the last 30 days, DeHann said. It was $2.33 on May 23, and its averaging $2.25 Friday, June 23.

That’s about on par with how much the price of a gallon of gas dropped nationally during the same period. Coloradans are paying more than people in other states.

North Carolinians have the lowest prices in the country right now with several stations charging less than $2 a gallon, according to GasBuddy.

“When it comes to fluctuations in oil and gas, it’s kind of like a race,” DeHann said. “Some places end up finishing faster and some end up finishing slower.”

And local taxes play a role in the different prices drivers pay around the country. California charges drivers 40.6 cents per gallon -- about double what Coloradans pay.

One reason local drivers haven't seen a bigger drop in gas prices this spring is because of a regional refinery problem.

The Phillips 66 refinery in Montana underwent maintain, which temporarily lowered the supply of gasoline in Colorado.

“Refineries in the summer and basically throughout the year are running 24/7,” DeHann said. “They are going to break down from time to time, resulting in less gasoline being produced.”

DeHann thinks prices in Colorado will drop this summer.

“It could be worse,” DeHann said. “We could be talking about Utah where prices have drifted higher in the last month.”

© 2017 KUSA-TV


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