Gas Prices Fall Slightly as Potentially Volatile Autumn Looms

This week the national average gas price  fell slightly — but that doesn’t tell the story of what’s shaping up to an interesting time for the oil market. First, according to GasBuddy data, the average gas price now sits at $2.88 a gallon, down 2.6 cents from last week. Meanwhile diesel prices nudged in the opposite direction, moving up 1.6 cents to $3.29 a gallon. Similarly there was a major disparity in how prices acted in Midwest compared to the West Coast.

Despite falling oil prices on the whole, the largest decline in average prices occurred in the Great Lakes region of the U.S. More specifically Michigan saw prices drop 12.3 cents followed by Ohio’s 11.1 cents, Indiana’s 10.0 cents, and Illinois’s 7.6 cents. As GasBuddy’s head of petroleum analysis Patrick DeHaan explained, “Great Lakes states have wreaked havoc on the national average, sending it down considerably as stations there have passed along the recent drop in oil prices relatively quickly.” However that wasn’t the case in states like Washington and Oregon, which saw prices increase following a recent natural gas pipeline explosion.

While pipeline explosions and refinery closures are certainly bad news, a much larger threat could soon upend the oil market. Following the disappearance of journalist Jamal Khashoggi from a Saudi consulate in Turkey, the relationship between the U.S. and Saudi Arabi could soon see a major strain. Although President Trump has been quick to reiterate that Saudi’s Crown Prince Mohammed bin Salman has denied allegations that he was behind Khashoggi’s apparent death, Trump has warned that there will be serious consequences if fault is found.  According to DeHaan, this developing story “could rile tensions between the world’s largest oil consumer and one of the world’s largest oil producers.”

Turning from frightening geopolitical stories back to the numbers at home, average gas prices are still up 2.5 cents compared to last month and 42 cents higher year over year. Once again diesel was even higher, climbing 57 cents from the $2.72 average it saw this time last year. Finally, despite the big price drops in the Great Lakes, the lowest prices in the nation remain in South Carolina ($2.60), Mississippi ($2.60), Alabama ($2.62), Louisiana ($2.63) and Oklahoma ($2.64) while some of the usual suspects Hawaii ($3.84), California ($3.82), and Alaska ($3.35) had the highest, in addition to the aforementioned Washington ($3.52) and Oregon ($3.37) .

From pipelines to murder plots, the oil industry and, by extension, gas stations are certainly finding themselves in a strange spot. And while it may seem dismissive to tie Khashoggi disappearance into a “pinch at the pump” narrative, make no mistake that the Saudi-U.S. fallout that could occur would be a major economic story. All this led DeHaan to conclude, “I don’t know that I’ve ever seen autumn so rife with possible volatility at the pump as we’re seeing now.”

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Amex Launches Digital B2B Payments Platform Business Link

For consumers, these days, there's no shortage of peer-to-peer apps they can use to move money, with some popular examples including Cash App, Venmo, and Zelle. As for businesses, the list of options for sending money to vendors may be more limited. Now, a well-known credit card company and small business supporter is introducing a new platform for this purpose. This week, American Express announced the launch of Amex Business...

Carbon Credit API Cloverly Joins Visa's FinTech Partner Connect 

Last year, Visa introduced the FinTech Partner Connect program to the United States, with the goal of introducing institutions to vetted startups that could help them expand their product offerings. Now, the latest company to join the program is Cloverly. Founded in 2019, Cloverly is an API for carbon credits, allowing businesses and consumers to help fight climate change. As the company points out, with the Visa partnership, Visa clients...

Prosper Announces $75 Million Growth Capital Financing

A long-admired FinTech has added some new capital to its coffers and it continues to grow after more than 15 years in business. Recently, Prosper Marketplace announced that it had closed a $75 million debt financing round. This capital came from a fund managed by Neuberger Bergman and will be used to help Prosper meet the demand for its loans, credit card, investment products, and more. According to the company,...