U.S. Energy Secretary Wright predicts gasoline prices may fall

U.S. Secretary of Energy Chris Wright. (Reuters)

[Financial Channel/Comprehensive Report] U.S. Energy Secretary Chris Wright cautiously predicted on Sunday (6th) that U.S. gasoline prices may soon fall, but he did not make a clear commitment to price cuts, nor did he propose a specific price reduction range or timetable.

"AXIOS" reported that Wright pointed out in interviews with multiple U.S. TV political programs on Sunday that U.S. gasoline demand usually drops after Labor Day (Labor Day) because the traditional summer driving season has come to an end. He also said that the government's recent relaxation of some summer gasoline environmental regulations may also help increase gasoline supply.

"Gasoline production is going to go up and demand is going to go down. So, if I had to guess, I think prices are more likely to go down than go up," Wright said on CNN's "State of the Union."

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U.S. gasoline prices are still at a high level. According to AAA data, the average retail price of regular gasoline in the United States reached US$4.15 per gallon on Sunday (1 US gallon is approximately equal to 3.785 liters, approximately NT$34.6 per liter), setting a record for the Labor Day weekend. Meanwhile, diesel prices have also risen to record highs, with knock-on effects on the overall economy.

Wright noted that the gasoline futures market currently expects prices to fall significantly in the coming months. He told ABC's "This Week" program that the market believes that gasoline prices will fall significantly, so rather than trusting his personal forecast, it is better to trust the market itself.

However, futures prices in the coming months are highly volatile and cannot accurately predict actual retail prices at gas stations in the future.

The recent increase in gasoline prices has been mainly driven by higher crude oil prices. Crude oil prices rose further as hostilities resumed. As of last Friday's close, global benchmark crude oil prices had exceeded US$96 per barrel (approximately NT$3,041), hitting the highest level in about six weeks, although more oil appears to be shipping through the Strait of Hormuz recently.

The market will next focus on oil price trends after the market opens this week. Crude oil prices are likely to rise further as new conflicts break out over the weekend, putting new upward pressure on U.S. gasoline prices.

With less than two months before the U.S. midterm elections, the price trends of gasoline and diesel have also received great attention. Energy prices not only directly affect people's daily expenses, but may also have an impact on the overall economy through transportation and other costs.

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