Oil and Gasoline Price Divergence

Sunday, October 11, 2009

The USA Today has an interesting article on this price divergence between NYMEX curde oil prices and gasoline retail prices, Low oil prices are not translating into low gas prices.

Bespoke Investment Group also performed a good analysis on this divergence:



And their respective Exchange Traded Funds performance year to date:


Last week in the Wall Street Journal, Mark Gongloff also focused on the fact that gasoline prices have stopped going down for the time being.

"This is highlighted perfectly by looking at the price charts of the oil and gasoline ETFs. In the first chart below, we provide a one-year chart of USO (oil ETF) and UGA (gasoline ETF). Even as oil prices have continued to fall in recent weeks, gasoline has diverged and gone higher. The second chart looks at the year to date change of the two commodity ETFs. As shown, USO is down 23% year to date, while UGA is up nearly 23%. This divergence is not what the consumer needs right now!" Bespoke Investment Group

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