Oil jumps and stocks slide: what it means for gas money

Warm-up

How do you usually get to school?

• Bus
• Ride in a car
• Drive myself
• Walk or bike

Top story

U.S. stocks fell on Friday as oil prices rose. The Dow Jones Industrial Average dropped 653 points, or 1.2%, and the S&P 500 lost 0.5%. U.S. crude oil climbed to about $103 a barrel, and Brent, the world benchmark, settled at $116.72, its highest since April. Reports tied the jump to fears that the U.S.-Iran conflict could flare up again. Investors also worry that costly energy can push up prices for everything else and slow spending.

Why should a teenager care? Gas is made from crude oil. AAA says the national average for regular gas fell 6 cents in a week to $4.27 a gallon as of Thursday, but it also says high crude prices are limiting how far gas can fall. This week, the Fed announces its interest rate decision on Wednesday, and the government's first estimate of third-quarter economic growth is due Thursday at 8:30am ET.

Why it matters to you: If you drive, or your family drives you, gas is a cost you feel every week. When oil gets pricier, a tank of gas has a harder time getting cheaper.

Your money

What a drive really costs

Gas prices are posted per gallon, but you pay per trip. To find the cost of a trip, you need one more number: miles per gallon (mpg), which tells you how far a car goes on one gallon.

Here is the math. Divide the miles you drive by your car's mpg to get the gallons you'll use. Then multiply the gallons by the price per gallon. A 100-mile trip in a car that gets 25 mpg uses 4 gallons. At $4.27 a gallon, that's $17.08.

Now you can see what a price change means. If gas rises 50 cents, those same 4 gallons cost $2 more. A car with better mpg uses fewer gallons, so it feels each price jump less. Carpooling splits the bill, too.

Guess the number

Gas is $4.27 a gallon. About how much does it cost to fill a 12-gallon tank from empty?

Stock of the day

ExxonMobil XOM +2.8%

Exxon's stock rose about 2.8% on Friday while the Dow fell 1.2%. It rose on a day when U.S. oil gained about 3.8% to around $103 a barrel, and rival Chevron rose 2.9%. Exxon finds, produces and refines oil and sells fuel, so its sales depend a lot on what oil sells for. Oil is a commodity: a basic raw material, like wheat or copper, that is bought and sold in huge amounts and whose price moves with supply and demand.

Pop quiz

Class discussion

Gas costs about $4.27 a gallon. Is it worth it to drive a friend across town for a $5 meal? What would make you say no?

Last bell

Hyundai just had its best quarter ever in the U.S.

Hyundai Motor America sold 246,896 vehicles in July, August and September, up 3% from a year earlier. That works out to about 2,700 cars, trucks and SUVs every single day.

Markets in 10 seconds