Memorial Day weekend in the United States marks the start of the summer and therefore of increased driving, which it usually meant increased demand and higher gasoline prices. This year, contrary to this expectation, the price of gasoline has gone down defying several supposedly inevitable forecasts.
For instance, the production cuts approved by the Organization of Petroleum Exporting Countries plus Russia persist, and they are expected to be renewed at the next June meeting. But increased production in the Americas, in Brazil, Canada, Guyana and the United States, has compensated for the production shortfall. Last month, West Texas Intermediate crude prices approached $90 per barrel, but this month they fell to under $80. Therefore, the national average price of regular gasoline went down this week to $3.58 per gallon, from $3.67 in April.
However, another astonishing fact is that contrary to what was usual in the past, this time the price of oil has gone down, despite the conflicts in Eastern Europe and the Middle East.
Finally, also defying expectations, according to the Federal Highway Administration (quoted in The Wall Street Journal 05/24/24) drivers in the United States during this year’s first quarter drove a record 763 billion miles. But demand for gasoline did not increase, mostly because of the growing number of hybrid and electric vehicles circulating throughout the country.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
