Wait a sec... gas prices are going up?

Right you are - an average gallon of regular in the L.A. area is $3.770, up nearly three pennies from last week, according to the government survey. That's despite continuing drops in the price of oil. Thing is, gas hasn't been falling at nearly the level that crude has - since early May, NY crude-oil futures are down 38 percent, but the average price of gas nationwide is down just 9 percent. From the WSJ:

The disparity comes in part because of a quirk in the oil market--U.S. gasoline prices are affected far more by international crude prices, which haven't come down as much as U.S. crude prices. In fact, the gap between international prices and U.S. Nymex oil is at a record high. That all could change--even if temporarily--should the success of rebel forces in Libya fuel investors' hopes for the reopening of the oil fields in the nation. Even then, gas prices are still lagging behind. Much of the fuel sold in the U.S., especially on the East Coast, follows the price of Brent crude, which is down 14% since the beginning of May. The Nymex price is primarily a benchmark for some oil in the middle of the U.S.

The rule of thumb is that a $10 drop in oil translates to an increase of a few tenths of a percent in gross-domestic product growth. But that assumes the decline flows through to the consumer level - and it doesn't appear as if that's happening, certainly not to the degree needed.