<\/p>\n
Let’s assume the news reports are correct: A deal will get struck in the next day or so that allows the Strait of Hormuz to reopen. <\/p>\n
That raises two quick questions: <\/p>\n
How fast will retail gasoline prices fall? How quickly can the Strait of Hormuz be reopened?$4 gas may not be far off<\/p>\n
The short answer on the first question is retail prices may drop to $4 per gallon on a national basis in the next week or so. Prices may not fall to $3.50 a gallon until late fall or early winter, said Denton Cinquegrana, chief oil analyst at the Oil Price Information Service in New York. $3.50 was a number bandied about in June up to the July 4 holiday.<\/p>\n
On the plus side, retail prices aren’t far away from $4. <\/p>\n
Prices were down slightly on Aug. 4. AAA’s price was $4.089 a gallon, down slightly from Aug. 3’s $4.095. GasBuddy’s $4.065 price was down 0.2% from the Aug. 3 average of $4.073.<\/p>\n
A Yemeni soldier stands guard in March as Houthi supporters rally for Iran and Lebanon.<\/p>\n
Mohammed HUWAIS / AFP / Getty Images<\/p>\n
The strait cleanup will be only one challenge<\/p>\n
Reopening the Strait of Hormuz will be a slower process largely because it has been mined and debris from damaged ships remains. So, there’s a lot of stuff to get cleaned up. <\/p>\n
Moreover, Cinquegrana reminded, many countries tapped their national oil reserves to mitigate the price effects of the U.S. -Israel-Iran war erupted on Feb. 28 and to ensure they had enough energy for their internal needs.<\/p>\n
Lastly, don’t forget the Ukraine-Russia War also is affecting oil prices, GasBuddy’s Patrick De Haan noted in a blog post. And there’s a risk that oil and gas prices may still rise, perhaps even this week. <\/p>\n
Assuming the deal everyone is talking comes together and the shooting stops, countries will start refilling their storage, and that will put a floor on prices for consumers. <\/p>\n
Related: Peace, no peace: Middle East turmoil leaves no one happy<\/p>\n
All of this is built on Trump Administration comments that a deal with Iran on the strait will come together in the next day or so. <\/p>\n
Some reinforcement to the idea came from officials in Qatar and Pakistan, who said progress toward a deal has been made. A Qatari foreign ministry spokesperson said drafts of terms have been circulating between Washington and Tehran, the Guardian newspaper reported. <\/p>\n
At the same time, Iran and Oman have been talking about the rules governing passage for vessels through the Strait. For years before the war erupted in late winter, about 20% of global trade in crude oil passed through the strait every day. <\/p>\n
More Oil & Gas:<\/p>\n
Iran de-escalation just hit energy stocksDrivers lose control over gas price squeezeDon\u2019t Be Fooled by Monday\u2019s Pullback, Treasury Yields Are Headed HigherMarkets flee from oil<\/p>\n
Oil prices dropped sharply on Aug. 4 and hit their lowest closes since July 10, The Wall Street Journal said.<\/p>\n
Brent crude, the global benchmark, fell 5.3% to $79.36, its first close below $80 a barrel since July 10. Brent has fallen nearly 10% since July 29. <\/p>\n
Light sweet crude, the benchmark U.S. oil, fell 5.7% to $75.77 barrel in New York. It’s down 10.3% since July 29. <\/p>\n
The oil-price drop has unleashed a huge rally in stocks, with the Dow Jones Industrial Average and Standard & Poor’s 500 Index hitting record closing levels and 52-week highs.<\/p>\n
But energy stocks retreated. <\/p>\n
The State Street Energy Select Sector SPDR\u00a0(XLE) exchange-traded fund slipped 0.5% to $58.52. Chevron (CVX), subject to a Trump accusation of profiting too excessively from the war, fell 1.4% to $190.40. ExxonMobil (XOM), subject to the same complaint, was down 0.7% to $153.96.<\/p>\n
Related: Mark Zuckerberg’s data center: Bigger risk than your house<\/p>\n
#long #Americans #wait #gas #prices #fall<\/p>\n","protected":false},"excerpt":{"rendered":"
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