Oil vs Gas

Since I was a kid the price of gas at the pump seemed directly proportional to the price of a barrel of oil.

A barrel of oil is 42 gallons.

They get 19 gallons of gasoline on average, from a barrel of oil, after refining.

They get a host of other products, tar, heating oil, plastic, etc. from the remaining 23 gallons.

45% of a barrel of oil turns into gasoline.

Working backwards; $100. a barrel of oil equals $4.00 a gallon of gas.

$50. a barrel should equal $2.00 a gallon.

$25. barrel = $1.00

For every dollar change in the price of a barrel of oil, gasoline should change by .04 cents.

 

 

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