“If I’m the president or if I ruled the world and gas prices were going down heading into the election, I would 100% take credit for it — despite not having anything to do with it,” Denton Cinquegrana, Oil Price Information Services (OPIS) Chief Oil Analyst, told Money.com in November 2022.
Election year gas prices are like a legend. We know they go down, and we suspect it’s politically motivated. But, expert opinions differ. To give you a better understanding of what to expect this election year, we examine historic trends in gas prices and commodity analysts’ research. Read on to learn more.
Gas Prices Will Fall–But Some Experts Say It’s Because of Winter-Grade Gasoline.
Cinquegrana argued that presidents don’t have the power to influence gas prices. Rather, he said, gas prices dip during the fall regardless of the election.
Why? Winter-grade gasoline is less expensive to produce. It ranges from $.10 to $.30 cheaper than summer-grade gasoline. Gas stations deploy winter-grade gasoline at the start of the fall season. Take the cheaper winter-grade gas, couple it with the decreased demand for gas during winter months, and prices drop.
Month-by-month gasoline price statistics from the U.S. Energy Information Administration support Cinquegrana’s assertion. For example, November gasoline prices were lower for the three years before the 2012 election and became more expensive the three years after. However, during the 2020 election, gas prices dipped to $2.11, the lowest November gas price since November 2004.
S&P Global Commodity Insights Claim Oil Prices “Slide” Just After Election Day, then Gain Near or After Inauguration.
Joe Innace and George Craig of S&P Global Commodity Insights examined commodity price shifts during U.S. election cycles for their three-part series, The Barrel. As part of their research, they created graphs showing oil prices 90 days after presidential elections from 1992 to 2012.
Innace and Craig claimed, “Some patterns are evident.” They reported that oil prices drop for a few weeks after a new president is elected, and then those prices rise near the inauguration or right after. If an incumbent is reelected, oil pricing remains stable after Election Day, according to S&P research.
American Oil Production Is at a Historic High Right Now.
Late last year, U.S. oil producers were pumping more than 13.2 million barrels a day, a record high. As a result, the U.S. is exporting about as much as Russia and Saudi Arabia produces. Analysts are projecting that oil demand will peak in 2024, but that demand will easily be met with our current rate of production.
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