KNOX COUNTY – The price of gas at the pump varies from location to location, but has been declining recently. According to GasBuddy. com as of Aug. 15, average price per gallon is $3.89 locally, down from a high of $4.69 a few months ago. Regionally, Lubbock appears to have the current lowest price at $2.97 gallon. Abilene and Dallas average around $3.09, with Wichita Falls averaging $3.25. The price of gas at the pump is directly related to price of crude oil per barrel. In March 2022, oil prices soared to highs not seen since 2008 as a result of the Russian-Ukraine war. The decrease since July is due to concerns over a looming recession and growing stockpiles.
As with most commodities, crude oil prices are impacted by supply and demand, as well as inventories and market sentiment. However, as oil is most often traded in future contracts (a contract is agreed upon, while the product delivery will follow in the next few months), market speculation is one of the principal determinants for oil prices. Traders make conclusions on how production output and consumer demand will likely develop over the coming months, leaving room for uncertainty.
Crude oil at the end of April 2020 was around $20 barrel. Prices increased steadily until March 2022 when it peaked at around $123 barrel. Prices since then have been up and down some, but overall have decreased to currently $95 barrel as of mid-August 2022.
The steady increase from April 2020 can be seen by these spot prices; at end of 2020 was $50 barrel, at mid-2021 was $75, end of 2021 was $79, March 2022 was $123, now mid-August 2022 down to $95.
The Covid pandemic also had an impact on oil prices. According to Statisca.com and other sources, in 2020 the pandemic resulted in crude oil prices hitting a major slump as oil demand drastically declined following lockdowns and travel restrictions. Initial outlooks and uncertainty surrounding the course of the pandemic brought about a disagreement between two of the largest oil producers, Russia and Saudi Arabia in early March. Talks between global oil producers ended in agreement on April 13th, with promises to cut petroleum output and hopes rising that these might help stabilize the oil price in the coming weeks. However, with storage facilities and oil tankers quickly filling up, fears grew over where to store excess oil.
A long-term factor impacting the price of crude oil is the growth of electric vehicles, but it is unsure at this time when and how much of an impact this will be.
Several sources are forecasting slight decreases in price to the end of the year, but so many variables impact the price of oil, it is difficult to forecast the price at the pump.