- Global oil markets have been rocked with repeated shocks this month
- Gas prices are, surprisingly, stable
The nationwide average price of a gallon of gas this morning sits at $3.21, according to AAA. That’s a cent below a week ago and 4 cents below a month ago.
Those figures sound like they come from a stable economy, don’t they? Yet, the past month has seen war in the Middle East and an escalating trade war between the U.S. and its major trading partners.
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Crude oil futures have shot up and rocketed back down over the last 10 days. Yet the price at the pump has remained remarkably even.
“The last time the cost for drivers was lower in late June was in 2021, when the pandemic depressed demand for the fuel,” notes The New York Times.
The Gas at the Local Station Is a Week or More Old
- Gas prices don’t change as quickly as oil prices
Why the stability? Because gas stations don’t buy gas every day.
Matt McLain, petroleum analyst at GasBuddy, told CNN, “We’re looking at an inventory at the local stations.” He notes, “the higher prices they have all paid has to, basically, run through the system in order for prices to start being reflected at the pump.”
AAA notes that U.S. airstrikes on Iran “caused petroleum futures to spike Sunday evening, with oil creeping up to $78/bbl. That quickly dissipated by Monday,” and oil prices were “back to what they were pre-conflict” by Thursday.
McLain notes, “We do project that prices should be falling” over the weekend and “into early next week.”
The traditional peak of the summer driving season comes in July. This year could be a high peak – the U.S. Energy Information Administration reports that Americans used 9.69 million barrels of gasoline the week ending in June 20, the most recent week for which data are available. A year before, we used 8.97 million in the same week.
