Oil prices posted declines this week trading near $100 a barrel, and even dipping below that mark for a short period of time.
Kelly Just with AAA-Washington says there were several reasons behind the drop.
“So, not only have Russia and Ukraine separately said that progress is being made in their talks that are continuing today, but also China has had a surge in COVID cases and has locked down several cities of about 1.5 million people. And so, their demand has dropped as well.”
Just added while the United States does not use much crude from Russia, the embargo is pushing prices on the open market higher, so what the U.S. purchases is going to cost consumers more.
However, Just says the price you pay at the pump is not only determined by the price of crude, but also when that station receives that refined fuel. “So, even if the price of crude continues to drop, your local gas station may have received a shipment when prices were the highest, and so they’re going to charge you that until they receive a shipment where the price is lower for crude. So, it’s not something that can happen overnight.”
The Biden Administration says it plans to release oil from the strategic petroleum reserve, but when has not been announced. In addition, the amount of oil to be released Just noted will not have a significant impact on what U.S. consumers pay.