Price at the Pump: Oil Prices Continue To Move Lower

Oil prices continue to shed the gains they saw in late July.  A barrel of West Texas Crude dropped roughly $2 in the past week, and is now sitting below $75 per barrel.  Patrick DeHaan with GasBuddy.com said the past couple of weeks have been a bumpy ride for oil.

“There's been a lot of headlines for oil prices to navigate including an economic slowdown both here in the United States and abroad in China," DeHaan said.  "That has the impact of potentially weakening global demand. On the other side of the equation, we still have on possible violence in the Middle East, retribution from Iran that hasn't happened yet."

DeHaan said the expectation over the coming weeks, gasoline prices will move lower because of the dropping oil prices and the conclusion of the summer driving season.  However, he noted the same can’t be said for diesel prices, since harvest is taking place nationwide, and many Americans are stocking up their heating oil for the fall and winter ahead.  With oil prices moving down, is there an expectation that oil production may change?

“OPEC has been cutting production now for over a year on a monthly basis," DeHaan said.  "They had talked about potentially starting to ease those cuts. Which could mean more production, although with economic weakness in China and the U.S., it's there really remains to be seen yet if OPEC will either restore production or if they will delay the restoration of production given some of the challenges in the global economy. So, OPEC certainly remains a wild card.  They had it been expected to ramp up some production as we go into the last quarter of the year, but again with late developments in an economic slowdown.  We have not yet heard if OPEC is going to move forward with restoring production or if they will extend their production cuts."

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