Gas Prices Coming Down; SCSU’s Banaian Explains Why
Gas prices in the St. Cloud area have come down a bit in the last week. St. Cloud State University Economist King Banaian says President Biden's decision to release 180 million barrels of oil from the Strategic Petroleum Reserve is reducing the price of gas at least in the short term. Banaian says that is reducing the price because it is adding a million barrels a day in supply.
Banaian says the releasing of large amounts of oil from the Strategic Petroleum Reserve has been done in the past to cushion price increases. He says when this happens it decreases the incentive for oil producers to go out and make more.
Banaian doesn't expect to see gas prices go back up until May when demand likely will force another increase. When Banaian joined me last month he expected to see gas prices rise steadily through the summer with a peak of $4.30 a gallon. He now says prices won't likely reach that number which is a good thing but it is difficult to forecast where prices will go with volatile world events. Banaian says doing this will likely cause an increase in prices long term because the price is being pushed down now.
Prices today in the St. Cloud metro area vary from $3.84 to $3.94 at most stations according to gasbuddy.com.
If you'd like to listen to my full conversation with King Banaian it is available below.