Oil Prices Plunge, Gas Not So Much

Refineries slashed production after demand for gas dipped
By Ambreen Ali,  Newser User
Posted Feb 16, 2009 6:33 AM CST
Gas prices are almost $2 a gallon, and are expected to climb to $2.50 next month.   (AP Photo/Paul Sakuma)
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(Newser) – Gas is pumping toward $2 per gallon—a 22% increase since Dec. 30—even though oil prices have dipped 16% over the same period. What gives? When penny-pinched Americans cut back on fuel last fall, oil refineries were slow to ease production. Now they're overcompensating with production cuts to recover lost profit. The gallon should peak at $2.50 next month, analysts tell USA Today.