Drivers fill up at a Shell gas station in Alhambra, California, on October 2, 2023.
Frederic J. Brown | Frederic J. Brown AFP | Getty Images
Over the weekend, members of the militant group Hamas launched a raid on Israel from the Gaza Strip, sending oil prices up more than 3%.
Industry experts say, however, that neither Gaza nor Israel produce significant amounts of oil, so the overall impact on oil and gas prices is likely to remain limited as long as third parties from within and outside the region are not involved.
“Unless we see the ‘war’ between the two sides quickly expand into a regional war in which the United States and Iran and other backers of both sides are directly involved, the impact on oil prices will be limited,” said the managing director of Middle East Energy Consulting. Facts Global Energy’s Iman Nasseri previously told CNBC.
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As long as the violence doesn’t spread, U.S. oil and gas prices are likely to remain unaffected.
Natural gas prices are on a downward trend
In fact, American drivers have yet to see the impact of the conflict at gas stations. The average price of a gallon of regular gasoline in the United States on Monday was $3.70. Reportedly down 11 cents from a week ago to AAA.
Patrick DeHaan, director of oil analysis at GasBuddy, said downward pressure such as the jobs report and the possibility of further interest rate hikes by the Federal Reserve will likely continue to weaken oil prices.
On October 9, 2023, a fireball erupted during the Israeli bombardment of Gaza City.
Mohamed Abed | AFP | Getty Images
Furthermore, DeHaan said the current hostilities are “far removed, geographically or physically, from Russia’s invasion of Ukraine, which began last year.”
Unlike Gaza and Israel, Russia is a major oil and gas exporter. Iran, however, is “the wild card to be wary of,” he added. Iran congratulates Hamas on its offensive against Israel but denies involvement in the operation.
“Diesel is about to enter its peak season”
Heating oil prices are expected to rise, primarily due to seasonal changes. DeHaan said demand will rise as temperatures start to drop.
“Diesel is about to enter its peak season due to the heavy use of heating oil in the Northeast,” he said.
For now, U.S. motorists planning major road trips in the coming months don’t have to worry too much, but if they’re price-sensitive, they’d be wise to keep a close eye on the situation, especially if unrest escalates.
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