The cost of a barrel of oil today is probably a lot higher than you think it is, largely because like so many other things about the economy, things are more complicated than they seem.
Oil is a commodity, and so are gold and silver. You can buy silver, for instance, by mail and get a good price for it, delivered to you at a certain date, but if you want it right now you would have to go to retailer that sells silver and it would likely cost you more money because you'll have it in your hand today -- that's the "spot" price.
Texas oilman Rey Trevino says we're all hearing about the "price of oil" dropping below $100 a barrel this week as President Donald Trump pursues peace with Iran, but that's the price placed on the oil by the buyers and sellers on Wall Street for people who want oil next month or later.
If you need a barrel of oil today, the "spot" price is significantly higher than that, he says.
"However, the physical price that we are paying right now, in the physical ports, like the Port of Houston, the Port of Corpus Christi, is literally 25-to-50-dollars higher than that," Trevino says.
It's really complicated when you figure that companies like refineries or the ones who take refined oil and then package it as motor oil for your car need a certain amount of oil every month to make their product, and when they can't find $100 oil they have no choice but to pay extra for the oil, maybe $130 -- their only other choice is to shut down their business until they can find more $100 oil -- so the costs go up and they have to end up charging more money for packaged motor oil.
If this goes on a while, pretty soon you have "motor oil price inflation," caused by a slight scarcity in oil and the rising market prices that result.
"The paper price of oil is the price we see right now, the price is $90 a barrel, that's what Wall Street has determined is the price of oil," Trevino says.