Gasoline prices will decline as we head into summer. Just like last year.
That’s according to the latest US government prediction.
Historically, the price of gas rises during the summer driving months when more people hit the roads. But in recent years, the financial markets have jacked up fuel costs so much during spring that those higher levels were unsustainable.
And while the drop in prices is good news for drivers, it sucks for Wall Street, where the myth of the “peak driving season” is a godsend for market manipulators.
Right around the time crocuses start popping through the spring soil, crude traders begin spreading rumors about trouble in the oil and gasoline markets.
The crocus eruptions give us pretty flowers. The traders, when they are successful, give us higher oil and gasoline prices. This year they have succeeded, so far.
The manipulation of the energy markets happens every year. So, like clockwork, I write about it, hoping that you’ll understand (once again) that there is plenty of oil and gasoline in a world where cars are becoming a lot more fuel-efficient.
The law of supply and demand says energy prices shouldn’t be as high as they now are. So you needn’t worry about those countrywide $4-a-gallon gas predictions that Wall Street is not only peddling but hoping for.
Some basics that you already know: Wall Street tries to spread fear about energy markets because traders make money when prices rise. This year, the troubling economic situation in Venezuela — an oil-producing nation — is one focus of those fears.
Another is that the Chinese economy, which has been weakening, will rise and create demand for energy products beyond all expectations.
Well, Venezuela has been troubled for a long time. And there’s no new unrest in other oil-producing nations. The Chinese economy, meanwhile, may be showing signs of life thanks to large stimulus programs by the government, but it still is far from booming.
The Energy Information Administration (EIA) has a more objective view of the energy markets. And it is predicting that gas prices will decline in the next few months to an average of $2.76 a gallon between April and September.
That’s better than the $2.85 a gallon last summer. And right now, the average price of regular gas is $2.85.
We are at the start of corporate earnings season, and it’s not supposed to be a good one.
According to institutional brokers’ estimate system data from Refinitiv, earnings overall for the first quarter of 2019 are expected to drop by 2.1 percent. If you exclude energy companies, which have volatile earnings, the decline is only supposed to be 0.9 percent.