Gregg Laskoski is a senior petroleum analyst for GasBuddy.com
Whether there's good news or bad news, either way it seems to work against American consumers where oil and gasoline prices are concerned. All we can do is provide context that will do one of three things: (1) inform sufficiently so that patience prevails; (2) incur contempt and frustration; or (3) inspire indifference. We're shooting for No. 1 to help everyone roll with the punches.
Earlier this year when the U.S. economy was anemic at best, NYMEX crude reached $107 per barrel and the average price of gasoline in the United States hit $3.90 per gallon. Price levels were blamed on U.S. fuel regulations mandating "summer blend" gas by May 1, and, consistent saber-rattling from Iran and Israel.
Fast forward to August 22. Encouraging recent data from home builders in the United States suggests the American economy may finally be recovering. (And yes, a stronger economy brings higher prices at the pump.) France, Greece, Spain, and Germany have reportedly made progress toward resolving the European debt crisis and that, in turn, pushed the euro to a six-week high versus the U.S. dollar. And regrettably, the saber-rattling has reached fever pitch.
There's even talk that President Barack Obama might release fuel from the Strategic Petroleum Reserve, and that could have the opposite effect from what it intends if investors interpret the move to indicate that the president is looking to diffuse the spike that would result from an impending attack on Iran. Skeptics see that as the desperate act of an incumbent afraid of Americans who vote their pocketbooks.
Where does that leave us? Gasoline in New York City averages $4.03; Los Angeles, $4.10; and Chicago is the worst at $4.24 per gallon. The national average price of gasoline ($3.70) has increased 21 cents per gallon in the past month and NYMEX crude is trading between $96 and $97 per barrel.
Of course, we hope to see fuel prices decline once we put the Labor Day weekend and the peak summer driving season behind us. History shows that Americans typically see the lowest gas prices in the fourth quarter as cheaper 'winter blend' gas become available and demand wanes.
But sadly, Iran and Israel are two immoveable forces that seem to be preparing earnestly for military confrontation, and Israel has publicly recognized the U.S. election in November as its decision-making fulcrum. What can we expect? Hopefully, both are bluffing and we will all be grateful to play the fool.
But what if either side chooses the pre-emptive first strike?