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The revelation that OPEC+ has cut 2 million barrels per day has surprised many. This audacious move, however, has not protected the oil price from an unpredictable downward drift. On Wednesday, the West Texas Intermediate (WTI) closed at $69.38, which is a $2.94 drop from the previous day. The low demand problem could also cause an increase in supply and a further fall in the market until the end of 2023, say market analysts.
Andrew Gross, the AAA spokesperson, asserts that this decline in gas prices is in accordance with existing historical trends. Concerning crude oil prices, the pattern of decline will be approximately 30% in a customary pattern from late September to early winter. Consequently, gasoline prices should follow the same downward trend. Recently, Gross noted that a large number of fuel locations in the U.S. are selling gasoline below the three-dollar mark. By the end of the year, Gross also estimates that the national gasoline price threshold could be reached. he holiday season now comes as an added respite for consumers.
The slight uptick in demand for gasoline last week, from 8.21 to 8.47 million barrels a day, contributed to this decrease in pump prices. Despite this, the significant drop in pump prices is mainly due to a remarkable increase in the total domestic gasoline inventory. There was an increase of 5.4 mbl to total stocks of 223.6 mbl. The Energy Information Administration (EIA) has recently released an update about how the energy market is performing. Based on this report, there’s a silver lining, as consumers may benefit from further reductions in fuel costs if the price of oil remains depressed. It gives hope to people searching for some relief at the pumps.
The end-of-year proclamation is that price movements continue along a downward slope in both the natural gas and crude oil markets. The emergence of this development is also an indication of fresh optimism among consumers who are struggling financially with regard to holiday travel and costs. American drivers are having some respite after the reduction in gas prices, which is crucial at a time when people are generally expected to spend more than usual on other matters.
