Buffalo, NY (WBEN) This has been a spring of rising gas prices since the war over the Strait of Hormuz began. But there was a glimmer of hope last week. The question is will it last.
Gas Buddy's Patrick DeHaan says oil prices have dipped after talk of a potential deal between the US and Iran to reopen the Strait of Hormuz. "Buffalo has averaged down about three and a half cents in the last week. The average to $4.51 a gallon," says DeHaan. But he warns the decreases, may be short lived. "Oil prices have bounced a little bit higher here this week after new attacks Iran has initiated, escalating the situation, and really no positive outcome yet to negotiations that have been talked about," explains DeHaan. He says oil prices are now bouncing back up to about $96 a barrel for West Texas Intermediate crude oil after having fallen as low as below $90. "We may see a little bit of an increase in our future, and much of the rest of the summer gas prices are largely going to be tied to the ongoing situation between the US and Iran, specifically more if the strait is open or if it remains closed. If it does remain closed, we could continue to see upward pressure on gas prices through much of the summer," warns DeHaan.
DeHaan says the Strait is vital, carrying millions of barrels of oil on a daily basis. "Over the course of the last 93 days, that 20 million barrel a day deficit that we are experiencing with the Strait closing has essentially led to a loss of nearly 1.8 billion barrels of crude oil that would have otherwise flown through or flowed through rather the Strait of Hormuz, so we're talking about well in excess of a billion and a half barrels of oil that have not gotten into the market that otherwise would have, and that is leading oil prices higher. In fact, I'm a bit surprised that, given that amount of oil loss, that oil prices aren't even substantially higher than where they are today," adds DeHaan.
CeHaan says gas prices in Buffalo are nearly $1.46 a gallon higher than exactly a year ago
Negotiations over Strait of Hormuz access may determine oil price for the summer
Negotiations over Strait of Hormuz access may determine oil price for the summer
