Crude oil dropped below $70 a barrel in trading Wednesday, for the first time in more than a year. So, what does that mean for consumers at the pump? AAA analyst Don Redman said a drop in prices goes against what we typically see in the spring when fuel costs increase due to demand and the transition to summer-grade gasoline.
“With this fall in the prices of crude though, it kind of changes the scenario for the consumer in that we’re expecting prices to fall according,” said Redman.
Redman believes the drop in crude oil prices is reflective of the markets after the collapse of a couple of banks. And whether that scenario changes in terms of the outlook for the markets, he said it suddenly could reverse and prompt demand for crude oil, and the ongoing invasion of Ukraine adds uncertainty.
“I think that right now for the consumer short term is that we could see a drop in prices for gasoline, but keep an eye on the markets and keep an eye on politics,” said Redman.
Crude oil prices account for 50 to 60 percent of the price of gasoline, and even with the current drop in barrel prices, Redman said he’s still advising Triple-A members to continue to budget for gas prices around the $3.00 mark. As for the typical price increase due to demand in the spring, we’re not having a typical spring.
“Cause we’re still having this late hurrah of winter in certain major markets, that’s really kind of driving them down. But for the gulf coast though there’s actually an uptick in demand,” said Redman.
The average price for a gallon of regular gas in Louisiana today is $3.09.
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