Oil prices have held fairly steady over the past couple of weeks.
West Texas Crude was down slightly to $85 per barrel to start the week. But, despite the last of movement, fuel prices had been steadily dropping since early October.
So, why the disconnect?
Patrick DeHaan with Gasbuddy says oil prices aren’t the reason fuel prices went up earlier this fall, and oil prices are not the reason those fuel prices are dropping now.
“Refineries that had caused prices to surge in September have now gotten back on line, maintenance is wrapping up in some of these facilities as well, and we’ve seen improvements in refinery disruptions that had caused the higher prices. And so, what does go up does come back down, and that’s what we’re seeing.”
When it comes to gasoline prices in the mid-$4 range, and diesel prices well above $5 a gallon, DeHaan says this could be the new norm for the America consumer. But, he does expect this new norm to last more than 6-12 months.
“We will have more refining capacity coming on line here in the U.S. in 2023. Not a whole lot, but maybe just enough to give us a little more breathing room so prices can decline. In addition, several new refineries, globally, are coming on line in the next 6-12 months, which could help ease the crunch. Much of this is not because of the higher price of oil, or necessarily the higher price of oil because of the Russian war, but it also has a lot to do with refining capacity which has been diminished over the past couple of year because of things like COVID.”
