Gas Prices Could be Starting to Back Down as Oil Prices Fall
As part of the stock correction over the past few days due to increasing COVID fears, the price of crude oil also tumbled, and this may lead to moderating gas prices, according to Gas Buddy Analyst Patrick DeHaan.
KGVO News spoke to DeHaan on Tuesday morning.
“If things hold consistent, we should start to see gas prices go down, especially towards the weekend, and it may take a bit of time to manifest in solidly lower prices,” said DeHaan. “But as you mentioned, the price of crude oil now just about ten dollars a barrel lower than its peak that occurred around July 5, so a couple of weeks ago, the concerns of the Delta variant spreading are increasing and I think that was behind the sell off yesterday in broader markets.”
DeHaan also looked at the OPEC oil markets.
“In addition, OPEC agreed over the weekend to increase production 400,000 barrels a day every month,” he said. “They will increase another 400,000 a day until 2022. And that's certainly good news to keep a lid on the price of oil as well.”
DeHaan said the U.S. imports a great deal of its oil, primarily from Canada.
“We've always been importing oil; that's never stopped,” he said. “The U.S. consistently has been importing five to 6 million barrels a day. But contrary to popular belief, the number one source of oil to the U.S. aside from what's produced domestically is Canada. We get about five to 10 percent of our crude oil from Canada that we consume in the US and that will never stop. We are reliant on other sources of crude oil. At its peak, U.S. oil production was about 13 point 1 million barrels a day, but under normal times, the U.S. consumes 20 to 21 million barrels a day of oil products, so we never will spot importing crude oil.”
DeHaan tempered the term ‘energy independence’.
“The U.S. has been what you call technically ‘energy independent’, but we will likely never stop importing foreign crude oil,” he said. “For the simple fact that U.S. refiners are able to produce refined product cheaper than almost anyone else. In addition, so much of what is imported is also exported, but we still import five to seven million barrels a day of crude oil.”
Gas prices in Missoula average about $3.24 a gallon for regular unleaded.
LOOK: Here are 25 ways you could start saving money today