Oil prices have moderated over the past couple of weeks, allowing fuel prices to flatten or even decrease in some states. Patrick DeHaan with GasBuddy says concerns are growing about the state of the U.S. economy and a potential slowdown which could curb fuel consumption.
“That, and an improvement in supply, gasoline inventories in the U.S. up for four out of the last five weeks, has contributed to the down drafts we’ve been experiencing, and barring any unexpected outages or hurricanes and such, we could continue to see prices moderating for the next couple of weeks.”
What sort of impact are Ukraine and COVID having on oil prices? DeHaan says those two issues are not active drivers of prices one way or another.
“The Russian invasion of Ukraine is partially the reason why diesel prices has seen such a significant gap to gasoline, and that gap really isn’t changing. I expect diesel to moderate, but it will likely remain very high when compared to gasoline. On the other hand, COVID-19 has played more of an active role in that it has more limited refining capacity. U.S. refining capacity is down about one million barrels a day compared to where it was in 2019, and that has curbed the ability for refineries to get as much diesel as the market is looking for.”
DeHaan says he’s hopeful that U.S. consumers will continue to see oil prices moderate in the weeks ahead. But he notes that a lot of volatility remains on the international scene.