Lower Gas Prices Expected for Labor Day According to Kiplinger Energy Outlook
==================================================================
In 2021, American drivers have been enjoying lower gas prices, with the national average for regular unleaded gasoline standing at $3.15 per gallon, according to Kiplinger's Economic Outlook. This marks a significant decrease from the previous year's average of $3.44.
The primary factors contributing to this drop in prices can be traced back to several key developments.
Firstly, the benchmark West Texas Intermediate (WTI) crude oil price has been trading lower in 2021, hovering near $63 per barrel. This decline in crude costs has directly led to cheaper gasoline at the pump.
Secondly, the global oil market has been well-supplied, reducing upward pressure on prices. This abundance of oil has been aided by a decrease in geopolitical risks, such as concerns about supply disruptions in the Middle East. For instance, the easing of tensions between Israel and Iran has removed a factor that often drives prices higher.
Moreover, slower economic growth in other parts of the world has helped temper demand for oil and gasoline, further containing price increases.
Looking ahead, WTI is expected to remain in the mid-$60s into the fall. Early fall isn't far away, and relatively mild weather is expected to keep nationwide gas demand muted. Surplus gas production can also be stored underground during this period.
However, it's important to note that a sudden downturn in the U.S. economy or a new geopolitical crisis could potentially affect WTI prices. Additionally, unseasonably cold weather could potentially cause gas prices to perk up later in the fall.
Diesel prices, on the other hand, are currently averaging $3.71 per gallon, down from $3.79 a year ago. For now, gas futures are expected to stay near $3 per MMBtu.
As for the global oil market, it remains well-supplied, with no mention of new information related to geopolitical crises or global economic growth. The moderating weather will also mean that gas-fired power plants won't be working too hard, further contributing to the lower energy prices.
[1] Source: Kiplinger's Economic Outlook
- The decrease in crude oil prices, such as the trading of West Texas Intermediate (WTI) crude, contributes to the reduction of costs in the oil-and-gas business, causing cheaper gasoline for American drivers.
- The energy industry, particularly the oil-and-gas sector, has seen a positive trend in finance this year due to the well-supplied global oil market and decreased geopolitical risks, leading to lower energy prices.
- In the future, the trading of initial coin offerings (ICO) might play a role in financing the growth of businesses in the oil-and-gas industry, considering the positive impact of lower energy prices on various sectors.
