Gasoline prices in the US fell below 2.8 dollars

After hitting a one-year high of $2.82 per gallon on April 16, US gasoline futures fell below $2.8 as global markets continued to assess supply risks. This decline has reduced an element of uncertainty in the ongoing oil trade through the Strait of Hormuz, as Israeli authorities have not been inclined to retaliate immediately against possible Iranian attacks and have sought to reduce regional tensions.

Geopolitical Stability and Oil Markets

While tensions between Iran and Israel usually threaten the security of trade on strategic transit routes such as the Strait of Hormuz, this time the Israeli authorities’ preference for diplomacy over possible retaliation created a positive atmosphere in the markets. This led to a decline in the risk premium for oil-derived commodities and thus to a stabilization in gasoline prices.

Supply and Demand Dynamics in US Domestic Markets

According to data released by the Energy Information Administration (EIA), crude oil inventories in the US increased twice as much as expected in the first half of April, indicating an abundant supply in the market. However, the decline in gasoline stocks and the second consecutive decline in production suggest that gasoline supply in the domestic market remains limited. Nevertheless, the increase in the amount of product supplied indicates that gasoline demand in the US remains strong, which puts upward pressure on prices.

Russia’s Refinery Capacity and Global Exports

On the other hand, the fuel export ban imposed by Russia in response to the refinery capacity crisis led to a 26.5% year-on-year drop in gasoline exports in the first half of April. Russia’s move caused a significant shortfall in gasoline supply on a global scale, which increased supply pressure on other producing countries and contributed to the rise in global gasoline prices.

Summary and Future Outlook

In light of these factors, fluctuations in US gasoline prices are shaped by both domestic market dynamics and international geopolitical events. Potential conflicts between Israel and Iran constantly put the security of oil trade through the Strait of Hormuz at risk, which in turn affects global gasoline supply. In addition, Russian export restrictions and inventory changes within the US also have an impact on gasoline prices.

Markets react very sensitively to such geopolitical and supply-demand shifts, necessitating constant monitoring and evaluation for investors and analysts. In the period ahead, understanding the impact of these factors on the market and potential price fluctuations will be critical for strategic investment decisions.