Price of Gas and Oil May Drop
The price of oil is a double edged sword for Montana. When the price is high the industry does well and so does Montana in terms of jobs and state tax revenue, but when it drops while the industry struggles, consumers benefit with a lower cost of living and lower cost of doing business.
But regardless, it is projected that the petroleum prices will continue to lower.
As of Aug. 7, oil prices plunged to their lowest level since June 13 – down five percent at times during the trading session. West Texas Intermediate Crude was trading at $51.17 per barrel – down more than 4.5 percent, while Brent Crude was trading around $56.35 per barrel.
The price for Bakken oil tends to be lower because of the cost of getting it to market. A year ago oil prices fluctuated in the range of $70 to $80.
“Demand for gasoline] is likely to suffer not only because [of] the trade rift, but as summer closes, demand will drop,” Patrick DeHaan, a senior petroleum analyst at GasBuddy.com,
While inventories might have a short-term impact, an ongoing trade war between the U.S. and China could weigh on prices.
Tensions ramped up over the past week as President Trump communicated his intent to impose 10 percent tariffs on the remaining $300 billion worth of goods coming into the U.S. from China. In response, China allowed the value of the yuan to drop to a more than 10-year low against the U.S. dollar – after which the U.S. labeled China a “currency manipulator.”
That means lower gas prices are likely on their way for drivers.
Prices may be under $2 per gallon again by Thanksgiving time, especially in mid states and southern states.As a point of interest: because of the supply vs demand issue, companies are ratcheting down production. Rig count in the US is 942 as of Aug. 2, 2019, which is less than July 26, and 102 fewer rigs over a year ago.