The stock slump may have put your 401(k) in the tank, but it has also helped lower the cost of filling the one on your car - thanks to a corresponding drop in crude oil prices. Over the past six weeks, oil prices have tracked closely to the S&P 500 Index, with West Texas Intermediate (WTI) Crude falling just over 13-percent while the S&P 500 was down 16-percent.
When the price of oil goes up or down, gas prices are sure to follow, but it takes a few weeks for the change to appear in the retail market. Typically, gasoline prices lag a few weeks behind crude oil prices as refineries buy the commodity, transform it into gasoline, and then ship it to gas stations at a lower cost than previous inventory. The final price depends on variables like type of crude processed, distance from refineries and whether it is transported by pipeline, barge or truck.
Market dynamics are favoring a fall in gasoline pump prices and some analysts are predicting as much as a 25 cent a gallon drop by the end of August. The U.S. average retail price of regular gasoline has fallen most of the month and is now averaging $3.58 a gallon nationwide, with the Gulf Coast least expensive at $3.46 and California the highest at $3.73 per gallon.
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