U.S. gas prices drop for 4th straight week
Yahoo Finance anchors break down U.S. gas prices dropping for 4th straight week.
Video Transcript
- We can't talk about inflation without talking about gas prices, which is dropping across the country, with the national average falling about $0.34 from about $5.02 last month. The greatest declines have been mostly seen in the South and the Midwest. The pain at the pump is where we find Sozzi's take today. Sozzi.
- Yeah, I'll hit some of the finer points. And I want to work Rick back into this one. So gas prices-- average natural gas prices down 34%-- down $0.34, I should say, in the past month. That is a good thing. And interestingly, consumers are now saving $140 million on gas each day because of that pullback. You have to wonder, what point does that go into the target aisles and some of these retailers?
We're not seeing that savings get put back into those retailers just yet. I will note this, demand is down 4.2%, week over week. So you'll start to see consumers balk at these high prices for gas. And be careful what you wish for. Because you think, well, consumers are under so much stress, perhaps we are teetering on a recession. Nonetheless, just take that stat and tuck it away. And here's my take here, ultimately. Don't expect gas prices, perhaps, to stay this low for this period of time. Don't put that bike away, folks. Because we're one hurricane away probably from going back above the high of over $5.02. That's just my take. But you know, Rick--
- Is that you on the bike?
- That is me on the bike. Slim, trim, and lean. Our team--
- Is that how you get here every day?
- That is how I get here. But Rick, there's nothing the President can do about this.
- There's not--
- And he is just really plunging in the polls because gas prices are still high.
- So what do we have? Gas price is around $4.64 right now. That is still way too high. I don't think any consumer thinks they're getting a break with gas prices at $4.65.
- Up $1.60 year over year.
Yeah, I know. But let's remember, this is global. This is this is really not a US phenomenon. It is just directly related to the price of oil, which is directly related to the Russian war in Ukraine, and a lot of other things going on. So if we are-- there is probably going to be a recession in Europe. And there could be, what you would call, a global recession, even if we don't have a recession here in the United States. That's actually good news for oil prices because that means worldwide demand, for oil prices will come down.
Let's also think about what's happening in China. Are they coming out of their COVID lockdowns or not? If they do come out, that means they're going to buy more oil and other types of energy because economic activity will pick up there. But if they're not coming out of their COVID lockdowns, then there will be a little less demand for oil, and that will keep prices down.
One other thing to watch for, Biden is going to Saudi Arabia this week. He has to come back with a deliverable, which is that, they are going to produce more oil. And that has to be an announcement that gets the attention of markets, and not just something that happens behind the scenes. Because if he doesn't come back with that, then he has gone there and met with a murderer, Mohammed bin Salman, MBS, who had Jamal Khashoggi murdered.
- For nothing to show for it.
- With nothing to show for it. So in the world of realpolitik, if he's going to take that risk, he needs to come back with something he can deliver to the American people.
- I come back for your earlier point to something that Roger Reed told us just a few moments ago, "the cure for higher prices is higher prices," which we've heard time and time again. That seems to be happening to some degree. When it comes to Saudi Arabia, what's so interesting about that is, analysts have also told us that even if Saudi does agree to increase production, that it's marginal in terms of the real effect. So you know, he's taking that risk for something that is, perhaps, a political victory, but not necessarily a real one in terms of the effect on oil prices.
- Yeah. And I'm not sure that formula applies, "the cure for high prices is high prices," when a war in Europe is the major factor that is pushing oil prices up right now. Just so everybody is aware of this, at the beginning of this war, a lot of analysts said, we do not think that Russia will weaponize energy, we do not think that Russia's opponents will weaponize energy. Well, guess what? Both sides have weaponized energy. Energy is now a weapon in this war. Russia knows. It Europe knows it. We're somewhat insulated here in the United States, but we are not immune from the global price of oil. So that is a huge wildcard that messes up the normal calculation in terms of how to get oil prices up.
- And not to mention, if we think gasoline prices here are bad, natural gas prices in Europe in particular--
- 10 times higher.
- --are a big, big problem.
-Absolutely.
