What is in this article?:
- Commentary: News of lower summer fuel prices could be false flag
- From good reports to bad
- Lower fuel prices could be a distant dream.
- Last month USA Today reported U.S. pump prices on average were down 18 cents over the preceding four weeks and were expected to fall another 20 cents a gallon by June.
- Sound reasoning for lower prices.
TRACTOR FUEL prices might fall by august, if the right conditions occur between now and then.
If you are inwardly rejoicing over news headlines recently that predicted fuel prices could drop by as much as 20 cents by Memorial Day, hold on to your hat because you may be climbing aboard a rollercoaster ride of surprises.
As recent as Monday, May 20, headlines from respectable newspapers, magazines and major Internet news sites have been touting the probability that pump prices across America—possibly California excepted—could not only be stabilizing for the summer months but could actually be falling as a result of increased U.S. fuel production.
Last month USA Today reported U.S. pump prices on average were down 18 cents over the preceding four weeks and were expected to fall another 20 cents a gallon by June. The Washington Business Journal reported at the beginning of May the American Automobile Association (AAA) predicted the price of gas could continue to fall throughout the summer. Purdue Agriculture, for long a stable news source for the farm and ranch industry, reported just this week that drivers should enjoy a summer driving season without unusually high gasoline prices that would "probably be lower than they were last summer."
The Purdue article offered some sound reasoning for lower prices. For one, increased production by non-Organization of Petroleum Exporting Countries has caused production cutbacks by OPEC—particularly Saudi Arabia, which is reporting spare capacity—and has resulted in fuel production that is growing faster than consumption for the first time in several years.
Add to that North America's oil boom. New technology that allows oil production from shale rock and bituminous sands has boosted U.S. and Canadian oil production enormously over the last year. In fact, the U.S. Department of the Interior recently estimated a total of 7.4 billion barrels of oil could be extracted from the Dakotas and Montana; another 1.4 million barrels a day will soon be produced from the growing Eagle Ford shale production site in South Texas. Also millions of gallons of new oil will be produced in Canada.
The aforementioned news sources are not the only ones to report the probability of lower fuel prices. Overall, the news, it would seem, supports the idea that fuel prices could remain stable or even fall slightly in the coming months. Joining Purdue, AAA and USA Today are reliable news outlets including the Associated Press, National Public Radio, CNBC and others.
To be honest, when the idea for this Farm Press report surfaced early last week, it seemed, for all the world, it would focus on the possibility of how fall harvest costs could be lower this year as a result of stable energy prices. That was until this week when reports started trickling in about pump price increases from the East Coast through the Midwest, Southeast and Southwest. In fact, a check while still in the process of assembling this report indicates escalating fuel prices may now prove to be a trend not only until Memorial Day weekend, but could continue well into the summer months.