Oil prices are constantly influenced by the demand and supply in the market. As the demand increases, the price goes higher. Typically, this demand is lower during the winter months as no area other than the North Eastern part of the US needs to use oil for heating. Apart from the demand, oil prices are also impacted by the oil price futures.

There is a constant trading in the commodities market and therefore rates fluctuate on an everyday basis, according to the investors' estimation of oil prices. Oil vs. gas prices is an interesting equation because of the absolutely direct relation they share. Comparing oil vs. gas prices is very important and experts through the world constantly study and analyze.

The 12 countries that produce 46% of oil in the world are part of what is known as the OPEC. They are also responsible for regulation supplies and prices. However, there is no scope for competition here because oil is an exhaustible source and could run out.

The gas prices rise directly in proportion to the oil prices. As mentioned above, the increase in the supplies is not in keeping with the rise in demand. Therefore, oil vs. gas prices equations work in such a manner that with every single dollar increase in the cost of the oil barrel, the cost of gas increases by two and half cents for every gallon at the pump.

However, gas prices are also partially dependent on taxes, the costs for refining oil into gas, the cost of transport and middle men commission for dealers.

Gasoline prices are affected by the oil prices because at least 55% of the gasoline's price is accounted for by crude oil. Therefore, the frequent changes in the price of gasoline, is actually indicative of oil vs. gas prices fluctuation on an everyday basis. Gasoline may sometimes be highly expensive irrespective of the oil prices. This is due to technical reasons like maintenance and disruption of distribution lines.

OPEC aims at keeping the oil prices averaging around $70 a barrel. If the prices go higher, other nations will be given an opportunity for drilling a new field; this however, may not be affordable to them if the market prices are reasonable.

700 million oil barrels are stored by the US as a part of the Strategic Petroleum Reserves. Such a reserve serves as a means to obtain an increased supply as and when required, for instance, during times of natural disasters and crisis management. Such a reserve also acts as a strong defense against potential political threats from oil supplier nations. Therefore, it is important to keep a check on the oil vs. gas prices.

Oil demand is affected by many causes that lead to a price fluctuation and changes in the price of gas. A fifth of the world's oil supplies are used by the US. About two thirds of this is used in transport.

A future contract or an oil future refers to a signed agreement that states the exact rate of oil at that particular time/day it was purchased or sold.