Gas and oil price update: good news and bad news
Gas and oil price update: good news and bad news
We’ll get some important house price information tomorrow, but there is no economic news of significance today, so let’s update gas and oil prices.
As indicated in the title, there’s good news and bad news. I’ll start with the bad news first.
According to GasBuddy, gas prices have not declined in over a week:
They have bounced off $3.64/gallon and stabilized at $3.66-7/gallon. Which still is only about $.20 higher than they were back in February.
But here’s the good news, in the form of a screen shot of oil prices this morning:
I have no idea whatsoever why oil prices suddenly declined further, or whether this will last, but as of now, oil prices are only about $3/barrel (or roughly $.06/gallon) higher than they were 1 year ago.
A comparison with the last year in gas prices:
suggests that, if oil prices continue in the $78/barrel range, gas prices will decline to roughly $3.25/gallon in the next several weeks.
Needless to say, if that happens, that is more money in the pockets of consumers to be saved, or spent on other things. It also means both consumer confidence and, politically, approval of President Joe Biden, will also increase – right before the midterm elections.
Regular unleaded 87 was not even close to flat here as it went from approximately $3.35 to $4.00 in Green Bay the last 10 days. I wonder if there are strong regional disparities going on. Two big box retailers (Costco and Fleet Farm) also sell gas at typically $0.15 less and both were mob scenes earlier this morning. At $3.35 I think the negative thinking was starting to diminish to a good degree, but not at $4.00.
Turns out Costco was about 50 to 60 cents cheaper. $3.49 versus the $3.99 to $4.09 that we see at most stations. No wonder it was mobbed. Put 3 gallons in the van yesterday and my wife filled it at Costco today. Heard something about a refinery fire in Toledo as part of the problem.
Gas in SoCal has gone up maybe 40 cents in the last couple of weeks. Price differences are even more localized than usual, some a little and others a lot. Presumably this is the time we switch to winter blend gas, or one of the other standard reasons for gas prices to go up.
the recent drop in oil prices started with the higher rents and owners equivalent rents in August; those increases in turn led to the upside surprise in August CPI, after which oil traders began to price in more aggressive quantitative tightening on the part of the Fed…then oil price fell further last week after the Fed and “a slew of central banks hiked rates” (Reuters headline, not mine) and oil traders began to price in a monetary policy induced global recession (World Bank economists concur, btw)…current oil prices are quoting November 22 WTI futures at $77.15; November 2023 WTI futures are 10% lower at $70.07…
i would not be surprised to see US oil prices bump a bit higher if Ian lingers any longer in the Gulf, but that would be short lived and not effect gasoline prices, as the refineries will remain well supplied from the SPR….remember, both oil and gasoline prices are set independently by traders on NYMEX, not by the oil companies….that’s why you might see the big integrated companies lose their shirts on refinery operations while seeing record profits on oil E&P in one quarter, only to see those losses and profits reverse in the next quarter…