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MONDAY, NOVEMBER 23, 2009
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Oil Prices Plunge, Gas Not So Much

Refineries slashed production after demand for gas dipped

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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.

Gas prices are almost $2 a gallon, and are expected to climb to $2.50 next month.
Gas prices are almost $2 a gallon, and are expected to climb to $2.50 next month.   (AP Photo/Paul Sakuma)
Oil refineries have slowed production in a bid to recover some lost profits.
Oil refineries have slowed production in a bid to recover some lost profits.   (AP Photo/Don Ryan, file)
Oil refineries were initially slow to clamp down on production when Americans cut back on gas last fall.
Oil refineries were initially slow to clamp down on production when Americans cut back on gas last fall.   (AP Photo/David J. Phillip, file)
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