Falling oil prices could help inflation pressures
There’s a silver lining to the bummer news that dropped, along with the stock market, about the new omicron variant on Black Friday.
Oil prices, which fell along with stock prices, failed to recover on Monday and could remain low enough to bring consumers relief at gas pumps, travel club AAA said in its weekly gas price update on Tuesday.
Washington’s average price of a gallon of regular gas was $3.88 Tuesday and the average in Spokane was $3.56, according to AAA.
The drop in oil prices, triggered by fears that the new variant will throttle economic activity around the globe over the coming months, could shave 20 to 25 cents a gallon off the current $3.34 per-gallon average price of unleaded regular, AAA spokesman Mark Jenkins said.
The price of U.S. crude oil fell 13% on Friday, closing at $68.15 a barrel – its lowest price since Sept. 9. On Monday, it settled at $69.95 and had fallen further to $67.62 by midmorning on Tuesday.
That’s a big drop compared to just a few weeks ago. Crude reached $77 a barrel on Nov. 9, and gas prices followed suit, climbing to an average $3.36 a gallon in Florida just before Thanksgiving.
Jenkins warned consumers not to expect prices to drop overnight, though.
“Gas prices normally rise like a rocket and fall like a feather,” Jenkins said. “So it could take a couple of weeks before prices at the pump fully reflect the downturn in the futures market.”
Patrick De Haan, head of petroleum analysis for the price-comparison website GasBuddy.com, said the return of travel restrictions in many nations would reduce demand for fuel and ease supply pressures that have been driving prices to levels not seen in seven years.
Of course, oil prices could stage a comeback if the threat from the omicron variant fails to materialize.
For now, the jury is still out on how the variant will affect demand for oil and gas, De Haan said.
Consumer confidence hit nine-month low last month
WASHINGTON – U.S. consumer confidence fell to a nine-month low in November, clipped by rising prices and concern about the coronavirus.
The Conference Board reported Tuesday that its consumer confidence index dropped to a reading of 109.5, down from 111.6 in October. It was the lowest reading since the index stood at 95.2 in February.
The survey was completed on Nov. 19 and would not include the ramifications of omicron, a new variant of the coronavirus that has begun to spread with few solid answers about the damage it might do to the U.S. and global economies.
Even before the omicron variant appeared, consumer optimism was being tested by price spikes across the board, particularly for gasoline and food.
The Conference Board’s present situation index, which measures consumers’ assessment of current business and labor conditions, fell to 142.5, down from 145.5 in October.
The expectations index, based on consumers’ outlook for income, business and labor market conditions, fell to 87.6 in November from 89.0 in October.
Survey shows home prices rose 19.1% in September
WASHINGTON – U.S. home prices rose briskly in September, another sign that the housing market is booming in the aftermath of last year’s coronavirus recession.
The S&P CoreLogic Case-Shiller 20-city home price climbed 19.1% in September from a year earlier.
The strong price gains marked a deceleration from August’s 19.6% year-over-year increase.
Still, September prices in all 20 cities set new records.
Phoenix was the nation’s hottest market, with a 33.1% price increase.
It was followed by Tampa (where prices rose 27.7%) and Miami (25.2%). All 20 cities reported double-digit increases. The smallest gains were in Chicago (up 11.8%) and Minneapolis (12.8%).
From wire reports