Many Americans see the price of oil quoted daily in various mediums: newspapers, on television, or they hear about it on the radio. Often crude oil benchmarks are quoted- say West Texas Intermediate crude- WTI, or Brent. However, it is only for simplicity, as dozens upon dozens of crudes all with their own individual prices are the ultimate factor in your gasoline prices.
Over 100 different types of crudes are listed
here- and virtually all these different types of oil are priced differently according to several factors, including supply and demand. Why does this matter? Because what one refinery in Ohio pays for oil is certainly going to be different than what a refinery in California might pay, and the two types of crude oil will certainly be different.
The trouble sets in when one crude oil benchmark becomes the basis for motorists ill-conceived forumlas that "when oil prices were X gasoline prices were X and this time around gasoline prices should be Y because last time oil was Y..." and so on. Many could only wish that the oil business wasn't so complex and that gasoline prices could always be determined by a factor, but unfortunately, oil and gasoline are different, and the price of each can move independently of the other.
Take Canadian oil, for example. In recent weeks, it has fetched a far lower price than WTI, which in turn fetched a much lower price than even Brent. There could be days where Brent crude is $15-$50 more expensive than Canadian oil, and that certainly does show up at the pump.