BruceinFL said:
Why is the price of gas coming down (news reports $.25/gal in the last few days) but the diesel fuel price has hardly budged? Can anyone explain this for me?? ?
Sure but its easier to let someone else explain like the EIA comment made a short while back and extracted for here
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With gasoline and crude oil prices dropping over the past several weeks, many people are wondering if this may be the start of a long downward trend that will lead oil prices to significantly lower levels in the near future.
While it is certainly possible that oil prices could continue the recent trend, dropping significantly over the next few months, there are several reasons why EIA believes the price drop may be limited. First, part of the reason prices have dropped recently is that upward pressure coming from gasoline during its peak demand season has vanished, with U.S. gasoline inventories apparently adequate to get through the upcoming Labor Day weekend, the nominal end of the peak season. Additionally, the lack of any major refinery or petroleum infrastructure damage through August, whether due to hurricanes or other reasons, has kept gasoline markets relatively calm. Thus, with the end of the peak gasoline season behind us and the peak heating fuel season not yet here, the market may be simply reflecting the usual shoulder period forces as it transitions from summer to winter seasons, resulting in an absence of product price pressures.
Nevertheless, as we get closer to the upcoming winter season, any concerns about the future adequacy of heating oil supplies could keep upward pressure on oil prices. With strong global demand for distillate fuel (diesel fuel and heating oil combined), given that diesel fuel markets in Asia and Europe are particularly robust, heating oil prices may rise to attract sufficient imports this winter to balance demand. The fact that diesel fuel prices have not dropped precipitously, along with gasoline, is an indication that the current weakness does not extend to all petroleum product markets. In addition, many of the global situations that concerned oil markets earlier this year have not abated. For example, a United Nations deadline set for Iran to halt its nuclear enrichment program is just two days away, with no signs that Iran will adhere to this deadline. Oil supplies are still being disrupted in Nigeria, concerns about oil production in other parts of the world remain, and the peak of the hurricane season is still ahead. All of these issues could keep oil prices from falling much below $70 per barrel.