After tumbling to a nine-month low of $3.368 gallon on Nov. 21, the Energy Information Administration’s (EIA) U.S. retail gasoline average is positioned to increase following higher wholesale costs during the final full week of November.
Wholesale gasoline costs were under renewed pressure in front of Thanksgiving Day on weak demand and heightened concern over a global economic slowdown triggered by euro zone debt problems. However, a surge in U.S. retail sales during the Thanksgiving holiday, which includes “Black Friday,” revived optimism for the U.S. economy going forward.
View Telvent DTN’s Weekly and Historical Gasoline Price Index.
The market also believes that European leaders will agree to some form of fiscal integration, heading off a possible breakup of the euro zone, amid their ongoing sovereign debt crisis.
The health of the economy is a critical factor for fuel demand, so the recent optimism by the market is pushing up gasoline prices in post-Thanksgiving holiday trade. However, the markets remain extremely volatile.
Oil prices are also moving higher on renewed worry over the security of supply in the greater Middle East and in North Africa amid protests in Egypt and Yemen as the Arab Spring continues.
A harsh crackdown to protests in Syria and an emerging opposition force in the Middle Eastern nation add to the worry. Syria’s ally Iran is also driving geopolitical risk for oil higher as western nations look to tighten the economic noose around the OPEC member for it nuclear weapons program.
About the Author
Brian L. Milne is the Refined Fuels Editor for Telvent DTN—a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for 15 years as an analyst, journalist and editor. He can be reached at [email protected].