Gas prices start flattening out
Published 12:15 pm Tuesday, March 21, 2023
The recent issues in the banking industry, both in the U.S. and abroad, have led to a flattening in gasoline prices after two weeks of increases, according to GasBuddy.com, a crowd-sourced website and mobile app that tracks the price at the pump.
Kentucky’s average gas price was $3.17 per gallon as of Monday afternoon, the same as Sunday, a penny more than last week, and 13 cents above a month ago, but still 79 cents per gallon cheaper than on this date last year.
The national average is where you see a bigger change. Monday afternoon it was $3.41, a nickel per gallon lower than a week ago. That’s five cents more than last month, but 83 cents less than a year ago.
“The broad concern over recent failures of the U.S. and global banking system has put enough downward pressure on oil prices that we saw a reprieve in rising gasoline prices in the national average , but it may be temporary in nature, and is unlikely to be a long-lasting trend,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Should the outlook for the banking sector improve, we could again see gasoline prices race higher, while continued or additional distress could raise the possibility of a broader economic slowdown, keeping gasoline prices in check. Overall, there are a lot of possibilities.”
After finding some support in late Sunday electronic trading on the heels of the UBS acquisition of Credit Suisse, oil markets started the week in the red yet again, with a barrel of West Texas Intermediate crude oil off 83 cents per barrel to $65.91, a nearly $10 per barrel decline in a week, or 12.5%, from last Monday’s $75.43 per barrel start. Brent crude oil was also in the red, down 70 cents to $72.27 per barrel, just off a $10 weekly drop from last Monday’s $81.51 per barrel level.
De Haan says much of the recent weakness in crude oil markets appears to be associated with the fallout from the banking sector after high level takeovers by U.S. authorities of Signature Bank and Silicon Valley Bank, and now UBS’s Sunday night takeover of competitor Credit Suisse. The anxiety has mounted that the banking failures could undermine deposits, laeding to economic fallout and a broader slowdown.