Demand for gasoline in the U.S. could be falling as price volatility, fueled by ongoing escalations in the Middle East amid the U.S.-Israel and Iran war, poses challenges to the global oil supply chain.
Low Demand in Peak Season?
On Wednesday, GasBuddy analyst Patrick De Haan said that demand for gasoline in the U.S. was at 8.84 million barrels per day, which looked “weak,” according to De Haan.
“Third week of July is traditionally the peak week for gasoline demand for the year,” the analyst said. He added that if the demand fails to hit more than 9 million barrels per day, “stronger arguments could be made for demand destruction.”
The analyst also reaffirmed, in a separate post, that the U.S. average national gas price could hit the $4/gallon mark if current trends continued. In his post, the analyst had said that the average price for a gallon of gas would hit $3.95 by the end of the day as many states were “seeing gas prices jump”
Mohamed El-Erian Echoes De Haan, Trump Touts Iran Deal
Economist Mohamed El-Erian also said that the U.S. national average price of gas will hit $4/gallon by the end of July. He also said that prices for diesel will hit the $5/gallon mark amid the current situation in the Middle East.
Meanwhile, President Donald Trump on Wednesday said that the Iranian government wanted to strike a deal with the U.S. as the Central Command (CENTCOM) announced further strikes against Tehran.
Notably, Trump had warned that the strikes against the country would continue into next week, saying that the U.S. would be saving Iranian Energy assets for last.
Gas, Oil Prices
According to the data collected by the American Automobile Association (AAA), the national average price for a gallon of gas was $3.890 on Wednesday. Diesel was at $4.9380/gallon, up from Monday’s $4.8820/gallon.
The West Texas Intermediate (WTI) crude fell below the $80 mark, trading at $79.30/bbl at press time. On the other hand, Brent crude was also down 0.55% to $84.48/bbl at the time of writing this article.
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