(NEW YORK) — Oil prices are dropping and are now back to levels not seen since before Russia invaded Ukraine. So why aren’t gas prices going down, too?
The trend is called “rocketing and feathering,” according to oil industry analysts. Gas prices rocket up and then they come down slowly like a feather in the wind.
Tom Kloza, the global head of energy analysis at OPIS, says the speed of price drops often is determined by the frequency of deliveries.
“You have companies that sell gasoline that vary from somebody that gets one delivery every week to companies that get seven deliveries every day if they’re a big box,” Kloza tells ABC News Radio. “So there are some people that immediately get the price decreases, but there’s others that have to wait a week.”
He adds that markets are also still rattled by recent price swings caused by a Covid lockdown in China and Russia’s invasion of Ukraine.
“People are afraid. They’re afraid to trade. And if you’re a retailer, you’re probably afraid to drop your price because you might have to raise it by 25 or 30 cents this weekend,” Kloza says.
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