Reuters – The price of gasoline in the US recently increased, going over $2.18 per gallon. This rise came after a period of lower prices, with the cost previously dropping to just under $2. This change is linked to the growing prices of oil-related products due to new supply concerns. The reason for these worries is the repeated attacks on oil tankers in the Red Sea by Yemeni Houthi forces. These attacks have led shipping companies to use longer routes, which pushes up the cost of crude oil for refiners.
Additionally, the Federal Reserve’s plans for several rate cuts next year have contributed to this price increase. These cuts are expected to boost energy demand and weaken the dollar, which is the currency used for gasoline pricing. However, it’s important to note that recent data from the EIA indicated a smaller than expected rise in gasoline stocks, which could also impact prices.
Overall, this situation seems to be a mixed bag for the economy. On one hand, the higher gasoline prices could lead to increased costs for consumers and businesses. On the other hand, the potential boost in energy demand and the impact of Federal Reserve policies could have positive effects.