By Irina Slav
Prices at the pump in the United States are set for a decline next week thanks to lower crude oil prices and the start of driving season, Bloomberg reports, citing data from GasBuddy.
“We did see a 7-cent decline in the national gas price last week, and I think you can look for another decline this week, so motorists would not be advised to be so fast to fill their tanks,” GasBuddy analyst Patrick DeHaan told Bloomberg, adding “I could see the national average down around $2.60 a gallon or even $2.59 gallon this week.”
Oil prices, which are crucial for price-setting among fuel retailers the world over, have been on the swing lately.
On the tailwind side we’ve had a decline in U.S. drilling activity and expectations that OPEC+ will extend the production cuts beyond their original end-June deadline. The latter followed reports that Russia might get on board with the Saudi extension proposal.
However, such an agreement is far from certain as per remarks by Russia’s President regarding prices in yet another string of mixed signals from OPEC’s biggest partner in the cuts, which, according to many, now sets the tune that the cartel dances to.
“Of course Saudi Arabia wants oil prices to remain higher. But we have no such need due to the more diversified nature of the Russian economy,” Vladimir Putin said earlier this week as quoted by Interfax.
The blurry picture of the future of oil prices is reinforced by the persistent worry about demand. The world’s top importer, China, is still in the spotlight, with U.S. President Trump earlier this week threatening another round of tariffs if his Chinese counterpart Xi Jinping does not attend a bilateral meeting scheduled for later this month during the G20 summit in Japan.
All these developments have a direct bearing on U.S. retail gasoline prices, which means no forecast is ever final but with local factors including rising production despite the lower drilling activity weighing on prices, these could indeed continue sliding down in the next few days at least.
At the time of writing, West Texas Intermediate was trading at US$53.80 a barrel, with Brent crude at US$62.54 a barrel, both up since opening.
By Irina Slav for Oilprice.com