Oil Prices Increase As Diesel Prices Continue To Slide
With many investors confident that the worst of the banking situation is behind us, oil prices are moving higher. West Texas Crude prices increased roughly $4 in the past week, trading in the low-to-mid $70 per barrel range, which means gasoline prices are likely not far behind before moving up. Despite those increases, diesel prices continue to drop, now to the lowest levels consumers have seen in roughly a year. Patrick DeHaan with GasBuddy says much of the decrease is due to the seasonality of diesel.
“Demand is starting to decline as we come out of the coldest winter months for diesel. It's also somewhat of an alarm bell for the broader economy that diesel prices are declining, and I think that's where there's a lot of caution being represented in a big drop in diesel consumption. And that's giving refiners plenty of room to be able to produce enough diesel that the market is looking for.”
DeHaan added when it comes to the recent jump in oil prices, much of that is due to positive news from the U.S. economy. He said as international economies improve, that will add additional pressure on oil prices. He noted China will most likely consume more oil as that economy continues to try to reopen following the COVID pandemic. And he added consumption will likely increase in Europe as the worst of winter weather is now behind that region.
“We're looking at markets that in the weeks ahead oil consumption likely to go up of course there's still some economic concerns but for now especially in developing countries like China that have reopened after COVID certainly a lot of upward potential possible for consumption.”
If you have a story idea for the PNW Ag Network, call (509) 547-9791, or e-mail email@example.com