During August, oil prices continued trading in a very narrow range but did achieve a small gain, starting the month at $41 and closing near $43 per barrel. The following graph shows the daily price movements over the past three months:
Significant uncertainty about the economy due to the virus’ impact has persisted for several months which has limited movement in prices. In addition to oil’s stagnancy, overall average wholesale and retail prices for August were flat compared to July. The graphs below show the movement of crude oil (converted to gallons) along with wholesale and retail fuel prices over the trailing 15 months:
Since retail and wholesale prices remained steady compared to the prior month, retail margins also barely changed. The following graph shows the retail margins over the trailing 15 months:
The outlook for oil prices over the next few months continues to be highly dependent on the course of COVID-19. Sokolis believes oil prices will continue to trade in the low- to mid-$40’s per barrel through early September. As fall begins, ongoing concerns about a resurgence of the virus will likely remain with the potential to increase restrictions. However, any additional progress toward controlling the virus could result in increasing economic activity and demand for fuel. If so, prices would likely rise toward $50 and beyond through the end of the year.
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