A Villanova University professor told Action News two things he’s watching right now to determine what happens to prices at the pump: the Organization of the Petroleum Exporting Countries (OPEC) and the war in Ukraine.
“If OPEC decides to increase production, that will moderate prices. And certainly market volatility will subside if there is a resolution in Ukraine. There is no doubt,” said Scott Jackson , visiting professor at the University of Villanova.
The volatile market is ultimately keeping pump prices high, although we’ve seen a slight drop in recent days.
“The effect of the release of oil from the reserve is having an effect not only in the United States but also in other countries,” Jackson said.
But for now, we are feeling the effects of volatility in all directions, it seems. Food costs more to buy and transport.
“In Pennsylvania, 96% of manufactured tonnage is transported by truck. Diesel costs go into the prices of everything you find on the shelves. Eighty-eight% of communities in Pennsylvania rely exclusively on trucks to transport their goods “said Rebecca Oyler. , president and CEO of the Pennsylvania Motor Truck Association.
Flying costs more too.
On Tuesday, Delta announced a fare increase of $15 to $20 per trip in the second quarter to offset rising fuel costs.
“Their number one cost is fuel. And it comes straight from the refineries. Unless they were able to negotiate this whole mess of long-term, lower-cost contracts first, which Southwest (Airlines) did there. about 15 years old,” Jackson said.
Oil prices have fallen in recent days, but experts warn that we are far from off the hook.
“If there are military escalations from (Vladimir) Putin in Ukraine, you can throw all that out the window and expect oil prices to go up,” Jackson said.
But why aren’t gas prices falling as fast as they are rising?
“I think some refineries are trying to make up for lost revenue. Maybe they’re trying to get some cash,” Jackson said.
He also says that refineries lose money when the price of oil is too high.
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