Weakening Crude Oil and Gasoline Prices May Seek Lower Bottom

  • Brian Turner
  • Aug 4, 2022
  • Americans are driving less than during the pandemic after gasoline prices soared above $5 a gallon across the nation. With the surging shale oil production and lack of new demand, oil prices are likely to continue to decline for a while.

    Benchmark stock indexes wavered in choppy trading ahead of the jobs report and crude oil continued to slide and dropped to a six-month low. 

    The S&P 500 index was nearly unchanged at 4,151.94 and the Nasdaq Composite index increased 0.4% to 12,720.58. 

    Futures of crude oil declined $2.31 to $88.35 a barrel and natural gas fell 9 cents to $8.16 a thermal unit. 

    Crude oil futures extended losses this week to 10% and fell to the lows last seen February 3. 

    On a weekly basis, West Texas Intermediate crude oil in New York and Brent crude in London, U.K.  are down the most since April on the global recession worries and falling energy demand from China and rising inventories in the U.S.

    Falling demand and rising supply have changed the direction of gasoline prices at retail gas stations. 

    Demand dropped to 8.54 million barrels a day from 9.25 million barrels a day in the previous week, according to the U.S. Energy Information Administration. Gasoline supplies also increased by 200,000 barrels to 225.3 millions of barrels

    The current demand for gasoline is in-line with the demand levels seen in July 2020, when Covid-19 restrictions kept most drivers away from roads.

    If the current demand remains low and gas supplies continue to rise, crude oil prices on exchanges and gasoline prices at retail stations are likely to fall further.  

    Gasoline prices at pumps across the nation dropped for the 50th day in a row, AAA reported today. 

    Average gasoline prices at retail gas stations fell to $4.14 a gallon, 67 cents lower than a month ago and 90 cents below the peak in June. 

    Gasoline prices are still $1.05 higher than a year ago. 

    Average regular gasoline prices on Thursday ranged between $3.65 and $5.54 a gallon.  

    The West Texas Intermediate crude oil price was $101.31 a barrel on July 29, 2022, $3.60 above the previous week’s price and $27.38 more than a year ago but 28% below the $123.70 a barrel on March 8, 2022. 

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