Know The Difference Minute

Most consumers don’t care about oil prices. They care about gasoline prices. 

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Crude Reality
Welcome to the Know the Difference Minute for Wednesday, September 20th.
Oil prices eclipsed $90 per barrel. It was 70 in June, but it’s short of the $123 it hit in March 2022.
Most consumers don’t care about oil prices. They care about gasoline prices. The nationwide average price is back to where it was in October of last year.
OPEC has cut production. While US production has been increasing, it’s still lower than its March 2020 level.
At the same time, total miles driven set a new record. Supply is constrained while demand has grown. Simple.
For the typical household, gasoline is 2% of monthly spending. It peaked at 5% of spending in 1980 and has been trending lower as cars have become more fuel efficient and incomes have grown a lot faster than gas prices. That’s little comfort though when you look at your receipt after filling up.
I’m Brian Jacobsen, Chief Economist at Annex Wealth Management. That is your Know the Difference Minute.