Oil prices continue to soften, not on news from China, not because of the on-going war in Ukraine, but concerns over the U.S. economy. Patrick DeHaan with GasBuddy said investors are concerned about everything from Wall Street to Main Street.
“While China has disappointed as of late, as COVID cases had surged in winter we’re now starting to see some of those case numbers decline. So, any optimism though from investors on China and its potential increase in consumption that could come in the months ahead is at least, for now, being offset by concerns over the U.S. banking system that could push the U.S. into an economic slowdown.”
While inflation has little direct impact on oil prices, or what consumers pay at the local station, DeHaan noted investors are worried increase interest rates will stall the U.S. economy, cutting demand for fuel. And he noted, surprisingly enough, Russia’s invasion of Ukraine is not impacting fuel prices right now.
“We’ve seen sanctions take place, and by and large, we have still seen Russia continue to ship crude oil. And so Russia’s oil production remaining relatively strong has had a cooling effect on oil prices over the last 12 months as the incursion the war in Ukraine has continued the fact that oil does continue to flow from Russia has helped cool markets back down after initially expecting about a year ago that the war was going to have a chilling effect on oil production in Russia that has not been the case.”
That DeHaan pointed out has resulted in oil prices spiking last year around $130 per barrel, and retreating Monday in the mid-$70 per barrel region.
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