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an image of the front of a gas or gasoline pump at a filling station showing the gallons and price for the sale (Source: Ck1media/Wikimedia)
US President Joe Biden had proudly announced that gas prices had reached their lowest levels in the past two years at $3.40 per allow, “the lowest since early February and lower than when Putin invaded Ukraine.” US crude oil prices dropped to their lowest level in nearly a year, pushing down gas prices by 6 percent in the last month.
As of today, the national average price of gas is $3.40 a gallon – the lowest since early February and lower than when Putin invaded Ukraine.
Millions of households and businesses have been relieved by the falling fuel prices since Russia invaded Ukraine in late February and drove up energy costs.
Since June, global oil prices have dropped about 35% as China’s strict coronavirus restrictions have kept demand weak, and some of the world’s major economies have indicated that they are heading toward recession.
American drivers have benefited from lower gasoline prices as a result of that.
Concerns that protests in China against Covid-19 lockdowns will dent demand have caused US oil prices to reach their lowest level since December 2021.
West Texas Intermediate crude oil futures, the US benchmark, fell 2.7% on Monday to trade near $74 a barrel, its lowest level since December 2021. Futures for Brent crude, the global benchmark, fell 2.9% to $81 a barrel, their lowest level since January.
Over the weekend, the protest occurred across China in an occasional series of demonstrations against the country’s zero-Covid strategy.
A deadly apartment fire in Xinjiang sparked the protest. The incident showed that lockdown measures had prevented firefighters from reaching the victims.
Despite a reduction in oil production from OPEC+ members beginning this month of 2 million barrels per day, global oil prices have fallen. OPEC+ will meet again on Sunday.
According to the AAA, the national average price for a gallon of gas is now $3.55, down 0.3% from yesterday and 5.7% less than a month ago. According to the Energy Information Administration, crude oil prices significantly influence US gasoline prices.
Meanwhile, major developed economies still need to decide how to price Russian oil due to the West’s attempts to cap it. Economies are jittery because of the concern that a cap on revenues might adversely affect the global oil supply.
Last week, media reports suggested that Russian oil might be capped at $65-$70 per barrel, near its current market price. However, that level would have minimal impact on Russia.
Western powers setting the price lower could exacerbate the global energy crisis, particularly if Russia retaliates. Driving up prices and stoking global inflation, Moscow could cut production by more than anticipated.
According to Oanda senior markets analyst Craig Erlam, the prospect of the sanctions being imposed at a level that does not severely impede Russia’s oil sales—which have contributed to oil price declines—or place its consumers in an awkward position is becoming increasingly likely.
“It’s looking increasingly likely to be done at a level that doesn’t particularly hinder Russia’s ability to sell crude — which is contributing to the drop in oil prices — or put its buyers in an uncomfortable position,” Craig Erlam, senior markets analyst at Oanda, wrote in a Monday note.
The price limit will go into effect starting Dec. 5, the same day the European Union bans seaborne Russian crude oil imports.
According to Deutsche Bank analysts, the EU sanctions could create a “moderate supply risk” between January and March 2014, and Russia’s interest in maximizing export revenue would likely blunt the impact.
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