Just a couple of weeks ago, gas prices were falling steadily on their way to $2 a gallon for much of the country.
That trend hit a speed bump after rising tensions between Iran and the United States put upward pressure on oil prices. And an explosion and fire at a key East Coast gasoline refinery sent wholesale gas prices for the Northeast up 7 cents a gallon to $1.86 Friday, essentially matching gas futures’ biggest one-day rise this year.
“It’s kind of been a perfect storm of events,” said Tom Kloza, head of energy analysis for the Oil Price Information Service.
So far, prices at the pump haven’t reflected the problems in the oil and gas markets.
The national average price for regular gasoline was at $2.67 Friday, little changed in the AAA reading compiled by OPIS. The price is down 4 cents from a week ago, and 18 cents from a month ago.
Kloza said wholesale prices have fallen even more, about 45 cents since early May, suggesting that prices still have some room to fall.
“If all these factors do anything, it may be to slow the trend of declining prices, rather than raise retail prices,” he said. “I don’t think there will be shock and awe at the pump.”
The refinery fire could mean slightly higher prices in some Northeast markets, but Kloza said that could be relatively short lived if it happens.
Despite a general downward trend in gas prices, outside, unplanned events can affect prices in the short term. If this summer brings any major hurricanes hitting oil platforms or refineries along the Gulf Coast, that can cause a price shock.
On a macrolevel, the looming trade war between the United States and China has been pushing prices down, because of fears it will lead to a global economic slowdown and less demand for energy. If the G20 meeting next week produces signs of a deal between the two economic superpowers, that could lift oil prices as much as any other factor, Kloza said.