Key Takeaways:
- The summer squeeze of high gasoline prices may be behind us.
- The war between Russia and Ukraine will play a big role in the weeks ahead.
- Experts want to be optimistic, but some are concerned about an oil price spike.
Optimism Of Lower Gasoline Prices Is The Hopeful Expectation
Gasoline prices in Europe and the United States are expected to fall before winter.
However, there is a discrepancy between the two, as Europe has higher taxes than the US. Gasoline prices in the US are much lower than in many countries. For example, drivers in Amsterdam and Norway pay nearly three times more than those in the US.
Interesting to note is that in a few Latin American and Middle East countries, oil is produced by government-owned companies; local gasoline prices are kept low as a benefit to local citizens.
All in all, the pain at the pump should lessen in the weeks ahead. Both regions are experiencing a downturn in summer travel. Patrick DeHaan, head of analysis at Gas Buddy, is quoted as saying:
“I think the good news is going to keep going for now.” Mr. DeHaan added, “Gasoline prices should continue to decline into the fall, barring a refining disruption.”
Consumers have not had to face gasoline prices as drastically as once thought. When war between Russia and Ukraine first broke out, oil prices shot up. Economists at that time predicted oil rising to $185 a barrel – thankfully, that never happened.
Lower gas prices help economies; the more money in people’s pockets, the more they can spend elsewhere.
Deeper Outbreak in War Could Change Everything
The critical issue at hand for oil prices is the Russia-Ukraine war.
If anything escalates beyond what we are witnessing, the oil will surely spike, and consumers will pay more for gas.
Not everyone is on board with falling prices. Some experts, although not the majority, are wary of geopolitical events causing a spike. A spike could indeed come at any time, but for the time being, the market is tamer than some analysts had expected.
Outside of the war, weather plays a factor too. The south and east coasts of the US frequently get hurricanes between August and October. Thus far, there have not been any hurricane-related shutdowns along the coasts.
In European markets, if Russia continues to restrict natural gas flows to Germany, markets will become jittery, and oil prices may rise; this is a fluid situation and can change immediately.
