Bank closures, falling crude oil prices, increasing demand highlight strange time in oil and gas markets
CAPE GIRARDEAU, Mo. (KBSI) – The closures of Silicon Valley Bank and Signature Bank have caused some concern among investors on fuel demand outlooks.
And crude oil has dropped from $80-plus per barrel to the mid-$60’s.
AAA Public Affairs Specialist Don Redman said this drop is something that only happens occasionally.
“Oil took a beating that we haven’t seen since April of 2020, since COVID,” he said.
History would suggest this factor would lead to a drop in prices at the pump, which Redman says could be the case in the short term. But he said with warmer months and, thus, increasing demand on the horizon, we should temper our expectations.
“If demand suddenly starts picking up and we see a shortage of inventory, which is typical for this time of year, we could see those gains lost within a month,” he said.
It also remains to be seen what OPEC will do when it comes to cutting back production, and whether or not the Federal Reserve will continue hiking interest rates.
“There’s some news of the day next week that really could determine up or down where the price of crude goes and thus the price for gasoline,” Redman said.