Ron Hurtibise | (TNS) South Florida Sun Sentinel
What’s unhealthy for the economic system is typically good for motorists.
High-profile financial institution failures despatched inventory market and crude oil costs plunging final week amid renewed considerations {that a} world recession may very well be taking form.
U.S. crude oil costs dropped about 13% over the previous week, from $74.43 a barrel on March 14 to $64.54 in early morning buying and selling on Monday. By mid-afternoon Monday, the worth was hovering round $66.15.
Oil costs fell 17% over the previous two weeks and oil futures had been buying and selling on Monday at their lowest costs since December 2021.
That’s a deep sufficient slide to place downward stress on gasoline costs. According to journey membership AAA’s weekly Gas Price Brief, on Monday a gallon of unleaded common value $3.44 nationwide, AAA statistics confirmed.
“There were significant losses in the oil market last week, which should enable gas prices to move lower again,” mentioned AAA spokesman Mark Jenkins. “The failure of two U.S. banks raised concerns of a global recession that could eventually hamper fuel demand.”
As oil costs fell final week, gasoline costs elevated in some elements of the nation, together with Florida, due to annual refinery upkeep and excessive springtime demand, AAA mentioned. But gasoline futures — which mirror what merchants consider gasoline shall be promoting for within the weeks to return — dropped 24 cents over the previous two weeks.
That’s an indicator “that pump prices should move lower,” except merchants out of the blue flip optimistic concerning the economic system once more, Jenkins mentioned.
Patrick De Haan, head of petroleum evaluation on the price-comparison web site GasBuddy.com, warned that the reprieve may very well be short-lived. Or not.
“Should the outlook for the banking sector improve, we could again see gasoline prices race higher, while continued or additional distress could raise the possibility of a broader economic slowdown, keeping gasoline prices in check,” De Haan mentioned in his weekly weblog. “Overall, there are a lot of possibilities.”
Either means, motorists are paying much less for gasoline proper now in comparison with a 12 months in the past, when Russia’s invasion of Ukraine sparked fears of world oil shortages. Prices climbed quickly after the invasion started in February, hitting $4.26 on common nationwide this time final 12 months, then hitting a document excessive of $5.02 by June 14.
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