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I meant this more in the sense of do they look at a specific benchmark to derive how prices are set. E.g, If gas is based on WTI, then Brent can be up or down
by chrisfinazzo 7y ago
I meant this more in the sense of do they look at a specific benchmark to derive how prices are set.
E.g, If gas is based on WTI, then Brent can be up or down without affecting it much - Prepared to be wrong.
While they aren't in lockstep, it looks like they play off each other most of the time. As you say, seasonality has a role and demand for heating oil v gas depends on the time of the year.
- Mikeb85 7y agoGasoline is one of many products produced from crude (others include kerosene, diesel, heating oil, butane, propane, plastics, etc...). You can also get a different mix of products depending on the grade of oil and refining technique, so gasoline has its own supply/demand dynamics which partially intersects with demand curves for the other products while crude is merely the input. So cheap crude does allow more room to lower the price of gasoline and cheap crude is often linked to lower demand, however they're not in lockstep due to the many other factors.