Sometimes a picture is worth a thousand words. It is instructive to look up a chart of the prices for ethanol, oil and wholesale gasoline. If you go to one of a dozen easily navigated financial sites, you can take a look at price relationships between these three commodities by charting the December contracts in each.
If you examine the December 2007 futures contract for oil, wholesale unleaded gas and ethanol you will see that gasoline and oil have a very similar pattern, namely, rising throughout the summer months, peaking in July and falling through about August 20th. From that time until now, there has been a steady climb in both oil and unleaded gasoline for the December months.
