The recent wild fluctuations in oil prices have been reflected in the end-user prices for various forms of fuel. This graph shows average prices at the pump for regular gas, diesel, and heating oil. What is remarkable is that they run nearly parallel to each other, except for a slow drift upward for diesel. These fuels have different patterns of seasonal demand (e.g., high demand for heating oil in winter and gas in summer), so their prices might reflect these variations. Yet, any seasonal price variations appear to be dwarfed by the price variations of the raw material in all three of these fuels: oil. Seasonal changes in demand are smoothed through storage of inventories and through price adjustments. Apparently, though, seasonal adjustments do not affect the prices of these fuels nearly as much as the price of oil does.
How this graph was created: Simply search for “Heating oil price,” then add the two other series. (Btw, the frequency of the series in this graph is monthly.)
Suggested by Christian Zimmermann
