US keeps adjusting habits, so it's cheaper to hit the road for the 4th this year

As the Fourth of July nears, it also means that we are in the Summer driving season. With a record amount of drivers expected to hit the road for the Holiday week, it seems to be a good time to check back and see what things look like on the oil and gas fronts.

One thing I've noticed is that> oil futures have gone up a bit recently, increasing by nearly 12% since hitting their lows at the start of this month. That includes another sizable increase on Thursday.

Oil futures settled higher on Thursday on worries about global crude supply disruptions as geopolitical pressure in the Middle East and Europe mounted, while a surprise increase in U.S. crude and gasoline inventories gave prices a ceiling.

Brent crude oil futures settled up $1.14, or 1.34%, to $86.39 a barrel. U.S. West Texas Intermediate crude futures settled up by 84 cents, or 1.04%, at $81.74.....

Cross-border strains between Israel and Lebanon's Hezbollah have been escalating, fanning fears that a widening war could draw in other countries including major oil producer Iran.

So the recent rise is due to nothing besides speculation and traders bidding things up.

It's sure not related to supply-and-demand, especially when it comes to gasoline usage in America. Even as travel amounts have generally gone up, Americans are using less gas than we did this time last year, and noticeably less than we did in the late 2010s. In addition, gasoline is more plentiful now than in June 2023.

So why would oil be trading 17% higher than it was a year ago? I know the oil market is not necessarily the same as gasoline, but it’s a pretty good correlation. Where’s the indication that there’s going to be some kind of supply tightness or explosion in gasoline usage in the near future?

In fairness, it looks like the gasoline futures have yet to be much different than what we had a year ago, so maybe pump prices for the rest of this Summer won’t reflect the runup in oil. And in fact, AAA says Americans are paying less than they were in gas at this time in 2023, a whole lot less than they were in 2022, and not that much more than they were at the end of June 2021.

Bottom line, Americans have adjusted their oil/gas consumption habits in the 2020s, both due to changing workplaces, but also in response to incentives the Biden Administration has put out for electric vehicles and higher fuel efficiency. It's the right direction, which insulates us from further shocks and variances in the market, and we need to stick with it.