|
|
Demand for gasoline in mid-May fell to 8.8 million barrels a day, according to the U.S. Energy Information Administration, its lowest level since 2013, apart from the plunge during the early months of the COVID War.
The average U.S. gas price was $4.61 a gallon on 30 May, the American Automobile Association reported, a record price that is 51 percent higher than a year previous.
Gas prices could average $6.20 in August if Western allies embargo Russian oil from world markets and producers fail to increase their output, analysts at JPMorgan warned.
TREND FORECAST: As China removes its current COVID lockdowns, demand for oil will rise, keeping prices at or near current levels and possibly pushing them higher.
Whether tomorrow’s prices will be enough to entice oil companies, especially the majors, and their investors to boost production is an open question.
It takes time to restart wells that have been shut down; by the time the companies are pumping more, the global economy might have slumped to the point that the new production is unnecessary and serves only to drive down oil’s price.
Aside from the odd blip, we see oil’s price remaining firmly in triple digits. And as we have detailed throughout this Trends Journal, with new sanctions placed on Russian gas and tensions heating up in the Middle East, the trend-line for higher fuel prices keeps rising.