Carrying The Ship – The Decreases in U.S. Gas Prices
With this previous summer’s fall in OPEC supply pushing crude oil prices higher, a recent trend has persisted that will be a major benefit to the American consumer. For nine consecutive weeks, prices at the pump have fallen alongside seasonal weakened demand and lower crude oil prices. For Thanksgiving this Thursday, the price for a gallon of gas is headed to its lowest Thanksgiving-day level since 2020, reaching an average of $3.25. This price is already cheaper than October by 25 cents and cheaper year over year by 36 cents. Currently, gasoline prices have experienced their longest downward streak in over a year, with consumers hopeful these trends are here to stay.
In adding onto more realistic comparisons, these lower gas transactions for the week will equate to $1.2 billion less when compared to the same week last year. However, these figures wouldn’t mean much if they were just short-term. Currently, prices at the pump have followed crude oil prices, which are heavily dictated by production policies instated by the Organization of Petroleum Exporting Countries, or OPEC for short. During this past summer, OPEC increased its sentiment over tightening production to increase prices, and the band of countries could make this same decision during its November 26th meeting. If another sizable production cut were to take place, all the progress oil prices have made could be reversed, increasing overall inflation as a result. Hopefully, rising domestic crude inventories could offset any negative effects of an OPEC production cut, but only time will tell if the American consumer has another hefty burden to bear.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.