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Subject:  Re: Oil Prices Date:  6/10/1998  7:52 AM
Author:  ppkimman Number:  844 of 14486

Pump (retail) prices have very little correlation with Brent/WTI crude prices, I am afraid.
Most governments have fixed pump prices and gasoline is taxed heavily. For example here some gas prices:
Holland: $1.10 p.liter = $4.18 p.gallon
UAE (Dubai):$1.03 p.gallon
I think in USA ( but correct me if i'm wrong) the gasoline prices are not regulated, so indeed there should be some correlation in US with crude pricing. I guess the supply/demand for gasoline in US has to be behind these increasing pump prices (summer driving season!?).

On Iran increased production: don't forget Iran has over 60 million people and some of the cheapest gasoline prices in the domestic demand growth (which is quite high) takes in incremental crude production. To really surprise you:
Iran IMPORTS yearly for over $100 million worth of super unleaded gasoline, since the local refiners can't make enough of the stuff........!

OPEC production numbers and quota always have to be analysed carefully before making conclusions.
Another growing issue is that ,while OPEC and non-OPEC members may agree on crude production/export quota or cuts, the members are also big petroleum refiners + exporters. And global supply of products like naphta,fuel oil, gasoline, diesel is not OPEC regulated,so members can "cheat" by increasing their products export, subject of course they have the refinery capacity available to process the barrels.
It's complicated.............
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