Letters to the Editor
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Inventory
The writer overlooks the reason that inventories are high, and that is the key to determining where the elasticity in the equation is going to fall.
When prices are rising oil companies buy every drop that they can possibly store, every day. That way they have the cheapest possible product on hand at all times. That's why there is so much inventory on hand. There is no incentive for them to lower prices. The longer they keep the cheap gas (which they are going to sell eventually no matter what they charge) the more money they make because gas prices are based on the current price of oil, not the price on the day the oil was purchased.
That's how they make more and more money as prices rise but point to paper thin margins. They calculate their margins based on $120 a barrel oil when they are selling gas made from $105 a barrel oil.
The oil companies will raise prices and wait. We can't wait, so we have no elasticity.