Low oil demand doesn't drive gas down
A man pumps gas into his car at the Gas & Shop gas station in San Francisco, Calif.
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BILL RADKE: People aren't driving their cars like they used to. This morning, the International Energy Agency once again lowered its forecast for global oil demand. So how come gas is still well above two bucks a gallon? Here's Marketplace's Jennifer Collins.
JENNIFER COLLINS: There's a lot of oil sitting around right now just waiting to be refined. Oil analyst Tom Kloza says inventories may have fluctuated recently, but...
TOM KLOZA: You know the recession in the U.S. and globally is still making for a very, very sloppy and well-supplied oil market.
Sloppy because there's more crude coming out of the ground than consumers are buying. But that doesn't mean gasoline prices will drop. Mark Waggoner of Excel Futures says refineries are cutting back on the amount of gas they pump out.
MARK WAGGONER: We believe they're trying to drive price of the finished products higher.
But Tom Kloza says refineries aren't to blame because they're just trying to recoup costs.
KLOZA: Whether you think an industry is populated by sons of satan or whatever, no business can take a finished product and sell it for less than the raw feed.
And Kloza says gasoline probably won't increase very much -- until the economy improves.
I'm Jennifer Collins for Marketplace.