Price At The Pump: Prices In The Middle Of A Tug Of War

Oil prices moved higher in Monday’s trade, spurred primarily by OPEC’s recent announcement that it would increase production next month by over 400,000 barrels.  While that is a hefty increase, Patrick DeHaan with Gasbuddy.com said the announcement was less than what analysts had expected.  Oil prices moved higher in Monday by 3.5%.

“Ultimately, oil prices have been doing this dance in the low $60 range," DeHaan noted.  "Last week, we were on the low side of the $60 range. [Monday], we're at about $63. So, ultimately kind of a net neutral decision here. There's still concerns over the U.S. and China as tensions re-escalate. So, a lot of that is putting the kabosh on oil prices here as well. So ultimately this is a tug of war that doesn't seem to be moving the price of oil much.”

What Impact Is Europe Having On Oil Prices?

DeHaan added the Russia/Ukraine war continues to impact oil prices.  He said despite recent escalations with Ukraine attacking Russia's long-range bombers, it remains to be seen if this is going to lead to anything major.

“President Trump had been talking about new sanctions on Russia that could limit Russia's oil output, but at the same time with OPEC increasing production," DeHaan said.  "All we're talking about here is basically Trump endorsing the Middle East, raising production at the cost of lower production potentially from Russia. So, OPEC has ample spare capacity. So, I don't know if there's any necessary change in the Russian situation with Ukraine, if it would negatively impact oil prices because of OPEC spare capacity.”

DeHaan added the U.S. economy is growing at a slower pace than expected, easing demand for oil.  Check out our Price at the Pump Podcast for  more from DeHaan, including how the on-again, off-again, tariffs are impacting oil investors:

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com