Price At The Pump: Will The Agreement Hold?

Cautious optimism; that’s the feeling for many oil investors after the United States and Iran announced a tentative peace deal, which helped prices drop to start the week. After dipping around 5% Monday, oil was trading lower in early Tuesday’s action, with West Texas trading at $78 per barrel, and Brent Crude at $81.

"Now we focus on the details, whether or not this deal, which is tentative, will be signed later this week," said Patrick DeHaan with Gasbuddy.com. "Obviously, we have seen deals fall apart in weeks past. So, a little bit of pessimism here, but some optimism that the deal will pan out. If it does allow the Strait to reopen, certainly that would be good news to allow oil supplies to begin moving again for global oil inventories to continue rising.”

Fuel Prices Were Already Moving Lower

DeHaan added while investors have waited for weeks for this announcement to come down, he noted no one will really breath a sigh of relief until the documents are signed on Friday. DeHaan added before the weekend announcement, consumers were seeing a bit of relief at the local station.

“In fact, some of the largest declines across the country over the last week have been along the West Coast. Average gas prices nationally fell below the $4 gallon mark for the first time since mid-April. The good news is while gas prices are still high in Washington state along with diesel, we've seen some big drops. In fact, one of the largest weekly drops in gas prices was in Washington state, prices fell $0.17. In addition, diesel prices down about $6.40 a gallon now in the state.”

Diesel prices in Oregon are now averaging $5.84 a gallon a drop of 12 cents over the past week, while Idaho’s price for diesel has dropped 19 cents to $5.19 a gallon.