Karl H said:Our fuel prices are going down alittle bit and we have the highest
fuel prices in the country...So I hear. Diesel in my area is still at $5.00
gal.
California has its own blend of gasoline that is different from the fuel used elsewhere in the country. This means that the supply and demand curves for California gas are different from the rest of the country's gas supply and demand curves. All of this oil price stuff follows the classic rules of supply and demand, it's just that there's different supply/demand relationships for at least 20 different types of crude oil as well as a handful of different gasoline blends and different gasoline octane levels. There's also supply/demand relationships for diesel, jet fuel, and fuel oil. Then you have the transportation costs for crude and for different finished products. When all of this comes together it gets very difficult to understand, but at the core it IS just basic supply and demand that drives all of it.