We discuss the paper ‘Asymmetric Price Transmission between Crude Oil and the US Gasoline Market’ by Najmeh Kamyabi and Benaissa Chidmi in the Journal of Risk and Financial Management (2023).

This paper analyses the relationship between crude oil prices (Western Texas Intermediate, WTI) and gasoline prices across the US using an asymmetric error correction model. Pricing is examined at the national level and within the four largest gasoline-consuming states: California, Florida, New York and Texas. This is important for both commodity and equity investors due to the measurable lag between the pricing of raw (WTI) and refined (gasoline) products, which can result in inflated margins for set periods.