Sunday, July 25, 2021, 11AM: Let’s talk about what happened with the financial markets this week and the possible impact on gas prices. On Monday, there was a general freak-out as the Dow was down close to 1000 points at one point that day. The angst correlated with new worries about the Delta variant of the coronavirus, and energy prices also took a hit that day. What was unsaid is that we had a lot of options and futures that expired that previous Friday, and that often causes some weirdness the following Monday. In fact, by the end of last week, the stock market had recovered and was touching new highs.
In energy-land, we saw the same dynamic. Oil prices went from $71.81 a barrel on Friday the 16th to $66.42 on Monday the 19th, and wholesale gas prices started to retreat, too. Some retailers took the hint and dropped prices down from that stunning $3.29 that was set on July 15, but others have been in no hurry. Given that wholesale prices also recovered by the end of the week, maybe that was the right move if you own a gas station.
Going into this week, there’s room for prices to get down to $3.09 before they would consider a reset back to $3.29. So, if you can find gas close to $3 a gallon, fill up! -EA