"Oil prices are inherently unpredictable. While many variables come into play, the basic push and pull of supply and demand is what ultimately matters. In times of heightened concern about recession, war, or other major disruptions, oil can swing suddenly."
"Because crude oil usually accounts for more than half of the price per gallon, it tends to move the needle the most. Sharp increases in oil almost always show up quickly at the pump. Declines in the price of oil, on the other hand, often translate into slower, more delayed drops in gas prices—the "rockets and feathers" effect."
"When an emergency arises, the U.S. has a reserve of crude oil called the Strategic Petroleum Reserve. Its chief function is to secure energy during disasters like sanctions, severe storm damage, or war. It can also help take the edge off brutal price spikes when supply gets hit."
Oil prices reached $98.76 per barrel at 9 a.m. Eastern Time, up $7.80 from the previous day and $27 above year-ago levels. Oil prices remain inherently unpredictable, driven by supply and demand fundamentals that can shift suddenly during recessions, wars, or major disruptions. Crude oil comprises more than half of gas pump prices, alongside refinery costs, wholesaler markups, government taxes, and station markups. Price increases at the pump occur quickly when oil rises, but declines happen more slowly—the "rockets and feathers" effect. The U.S. Strategic Petroleum Reserve serves as an emergency safety net during crises like sanctions or storms, providing immediate relief during price spikes but not long-term solutions. Oil and natural gas prices are interconnected; rising oil costs can increase natural gas demand as industries substitute fuels in their operations.
Read at Fortune
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