In mid May of this year the average spot price for a barrel of oil was a little over $61 per barrel. At the same time, the average price of a gallon of gasoline was $3.25. Fast forward to mid July and the average spot price of a barrel of oil is $73.44 versus the average price of a gallon of gasoline of $3.09.
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As the price of a barrel of oil trends higher, the pump price for gasoline has actually declined. What could be at play is oil company desires to keep a lid on profits so Congress does not impose additional taxes on the integrated oil firms. Will a result of this action by oil firms be earnings in the third quarter that do not achieve the expectations of analysts and investors?