Price At The Pump: Could There Be A Glut Of Oil?

Oil prices have traded lower for much of the past 96 hours, due primarily to growing optimism that an end to Russia’s war in Ukraine may be in sight.  Patrick DeHaan with Gasbuddy.com noted that’s not the only pressure pushing oil prices lower.

“There's been a growing consensus that as we get closer to the end of the year, that with OPEC’s continued production increases in oil that it will eventually lead to a glut of crude oil," DeHaan said.  "And so oil prices have been trading a little bit lower on the prospect that we are currently in a oversupplied situation.”

As of Tuesday morning, West Texas and Brent Crude were both trading lower, with West Texas trading around $62 per barrel, with Brent Crude around $65.

Diesel Prices Expected To Increase In Coming Months

Gas prices continue to move lower, but the same can’t be said about diesel prices.

“Diesel prices remain elevated because of relatively low U.S. diesel and heating oil inventories," DeHaan said.  "The national average for diesel, the most common price, did shoot up in the last week. So, this is something that we will likely see more of as gasoline prices will likely continue to fall off as we get closer to fall. It's going to be the opposite for diesel. And so, farmers out there, truckers, may want to brace for what the next couple of months will have.”

Currently the national average for diesel is $3.69 a gallon.  Washington’s diesel average is $5.01 a gallon, while Oregon’s is $4.46 and Idaho’s average diesel price is $3.93 a gallon.

What Impact Will Hurricane Season Have On Oil Prices?

When it comes to hurricanes, which can always be a problem for the oil markets this time of year, DeHaan said it looks like Hurricane Erin, a category five storm, won’t hit the United States.  But he said that doesn’t mean the U.S. is out of the woods.  For more from DeHaan, listen to our Price at the Pump podcast:

Remember to join us Tuesday morning’s during NW Ag Today for your PNW Ag Network Price at the Pump.

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