Here is a puzzlement, to use a phrase from Young Frankenstein, the movie.
Crude oil was falling in futures markets on Sept. 21. Gasoline and diesel prices are still going up.
But perhaps a little relief is coming because the crude-price decline is not to be sneezed at. Neither is the cause of the declines: a little hope for some sort of peace deal that sticks.
Related: Why $5 gasoline is about to force a major holiday shift
Light sweet crude, the U.S. benchmark crude was off 5.4% on Sept. 21 to $95.94 per 42-gallon barrel in late afternoon trading. The price is down about 9.9% from its Sept. 15 peak of $106.52.
Brent crude, the global benchmark, settled at $100.34 per barrel, down 7.7% since its Sept. 15 near-term peak. It briefly dropped under $100 during the day.
Alas, those declines haven’t yet reached U.S. pumps.
Diesel, the object of great concern because of its reach through the U.S. and global economies, reached $6.511 a gallon, according to AAA Fuel Prices. That’s up 28 cents in the last week, or 4.5%, and 16.3% so far in September. The year-to-date gain is 82.6%.
AAA was showing unleaded gasoline at $4.479 a gallon, up slightly from Sept. 20 and 9.75% so far in September. The year-to-date change: 57.4%.
GasBuddy.com put its U.S. average at $4.445, unchanged from a day earlier, but up 9.2% in September and 56.7% for the year.
As always, gasoline and diesel prices vary state-to-state, with California stuck with the highest prices (around $6.15 a gallon for gas and $8.42 a gallon for diesel). The lowest U.S. prices are found in Texas: $3.95 a gallon on gasoline and $5.971 on diesel.
AAA’s and GasBuddy’s websites can show you where prices stand down to metro area levels.
Peace talk may be just that: talk
The hope of peace is vague. President Donald Trump is set to speak to the United Nations on Tuesday in New York and will paint himself, the Independent wrote, “as the world’s peacemaker even as he stokes war in Iran.”
There has been speculation that Trump may meet with Iran’s president Masoud Pezeshkian, who will be in New York as well.
But be skeptical of the talk for three reasons:
- Trump already threatened more attacks on Iran, even to “blow the entire nation up.”
- Iran has threatened to widen the war.
- Pezeshkian is the titular face of the Iranian government, but the real power in the country is the Iranian Revolutionary Guard Corps, a very hardline organization that torpedoes a June ceasefire.
Chinese President Xi Jinping is scheduled to arrive in Washington, D.C., this week for an official state visit. Like the United States, China has struggled with the impact of higher oil prices because it has been the biggest customer for Iran’s crude oil.
More oil
- The Hormuz crisis just did what climate summits couldn’t
- A crack is forming across the markets
- Exxon Mobil’s future rests on massive play (it isn’t Venezuela)
Energy shares are a big laggard as stock indexes power higher
The combination of lower oil prices and whiffs of peace have set off a big rally on Wall Street on Sept. 21. The Standard & Poor’s 500 Index was up 1.5%. The Nasdaq Composite was up more than 2%.
Leading the S&P 500 higher were the Communication Services, Technology and Consumer Discretionary sectors, the three most influential pieces of the index.
Energy, because of lower oil prices, is the weakest S&P 500 sector: down nearly 2%. The Energy Select Sector SPDR Fund (XLE) was down 1.6%. Major oil companies, including Chevron (CVX) and ExxonMobil (XOM) were off more than 2%.
Related: JPMorgan gave up trying to call the end of the oil war
