ALEXANDRIA, Va.—Oil prices are rising again after the United Arab Emirates said it would not increase crude output faster, backtracking on statements it made on Wednesday that the country was in favor of boosting output, reports Reuters.
International benchmark Brent crude futures are up $5.43, or 4.9%, at $116.57 a barrel after dropping 13% yesterday in their biggest daily drop in percentage terms for about two years. U.S. West Texas Intermediate crude futures are up $4.49, or 4.1%, at $113.19, after slumping 12% yesterday, which was their biggest daily decline since November.
Wednesday’s drop was a “temporary correction" according to PVM oil market analyst Tamas Varga.
Reuters reports that oil price forecasts are up to $200 a barrel as the world tries to figure out where and when it can replace Russia’s crude oil supply.
Meanwhile, the record-high gasoline prices are taking its toll on the economy and Americans. The average price for a gallon of regular gasoline is now $4.318, AAA reports.
Douglass Distributing, which delivers fuel to gas stations in Texas, says that the impact at the pump is weighing on demand for other goods, reports KTEN.
"Our prices change at the rack at 7 o'clock. Those prices will be in effect in a couple hours, and unfortunately it's not something we can negotiate with the oil companies," Douglass Distributing CEO Brad Douglass told KTEN.
"It comes at a vulnerable time in our economy, because we are facing inflation, and this is going to accelerate the rate of inflation," he said. "We're selling less in our stores because people don't have as much in their wallet. It's going into the tank, not with the consumer goods."
California’s average gas price is $5.69 a gallon, and the state’s governor is seeking to give Californians some relief at the pump, reports the New York Times. Gov. Gavin Newsom said he was working with lawmakers on “a proposal to put money back in the pockets of Californians to address rising gas prices.” The relief may be a tax rebate, according to the governor’s office.
Near San Francisco, Ali Mashhoon, co-owner of Mash Gas & Food, an independent operator, told the Wall Street Journal that the station sells fuel at near cost, relying on high volume to make up for narrow margins. Daily sales have risen by about 2,000 gallons over the past month to about 14,000 gallons as consumers seek out the best deals on fuel. The station has two tanks that can hold up to 35,000 gallons combined, Mashhoon shared. Meanwhile, his c-store is paying 10% to 15% more at wholesale for the drinks and snacks it sells.
Separately, the U.S. Labor Department reports today that U.S. inflation reached 7.9% in February, a four-decade high.
Russia’s attack on Ukraine has sent wheat prices up 70% in Chicago, and because Russia and Ukraine are key suppliers of grains, vegetable oil and fertilizers, supply disruptions will be felt all over the world. TIME reports that a United Nations index of food prices hit a record in February.
PepsiCo, Coca-Cola, McDonald’s and Starbucks have each stopped business in Russia temporarily in response to the country’s invasion of Ukraine, reports CNBC. The brands were under criticism for not pulling out of the country earlier, while other U.S. companies announced suspensions and paused sales.
The NACS Fuels Resource Center provides context around fueling issues, including the backgrounders Convenience Stores Sell the Most Fuel and How Gas Is Priced.