Following a year of all-time record-high gasoline prices, “it’s been a pretty boring summer” this year, said fuel analyst Patrick DeHaan during the closing general session of CSP’s Outlook Leadership Conference in Rancho Palos Verde, California. But a lot could still happen before the end of the year.
Noting a current rally in fuel pricing, DeHaan, head petroleum analysts for Dallas-based GasBuddy, noted that crude oil prices are up 16%, gasoline prices have risen 40 cent per gallon and, in Chicago, diesel prices are up a full dollar per gallon.
“We’re seeing banks take long positions [on oil],” he said, “that means people believe gas prices are going to continue to go up.”
In June, gasoline prices stood a full dollar below the record-high average of a year ago. Today it stands about 20 cents per gallon less than a year ago.
“If your gasoline sales are down, you might be asking yourself, ‘What am I doing wrong?’ I assure you, everyone is soft,” DeHaan said, noting that fuel volumes remain 10% to 15% below pre-COVID highs.
With the average price currently standing at about $3.80 per gallon, current concerns that could force prices higher this year and into 2024 include:
- The Saudis have threatened to cut production through the summer and into September.
- OPEC has struggled to meet its quotas for 27 months running. That will likely continue.
- The federal government has said it will begin to refill its Strategic Petroleum Reserve.
- Hurricane season is just beginning, and some key prognosticators have said it could be a volatile season. “Watch New Orleans down to Houston,” DeHaan said. “There’s a lot of fuel out there, and when it comes to Mother Nature, that could be a big deal.”
- A federal election season is approaching and gasoline prices are often used in campaigning to one candidate's advantage against another.