Thread by @hugh_daigle

I've been getting a lot of requests to explain what's going on with oil/gasoline prices rn, so I made a plot of weekly average gasoline prices and WTI spot prices (both from @EIAgov) going back to May 2020 with some key dates. (1/7) #oott #energytwitter

First, notice how correlated the two trends are. Remember, according to EIA as of January 2022 56% of the cost of gasoline was crude costs: eia.gov/petroleum/gasd… (2/7)

There are 3 things going on: COVID, domestic politics, and international politics. Look at the increase in prices from November 2020 through January 2021. This corresponded w/ anticipated change in presidential administrations (& more COVID relief $$) (3/7)

and both @pfizer and @moderna_tx reporting vaccine test results. However, after the American Rescue Plan (ARP) was enacted in March 2021, the rate of increase really slowed down. I don't have a good explanation for this. (4/7)

Note the drops in WTI price corresponding to the Delta wave and the first reports of Omicron, along with plateaus in gasoline prices. (5/7)

The start of the big price increase we are dealing with today seems to coincide with the @nytimes article that really first laid bare the US intelligence on what Russia was planning wrt #Ukraine: nytimes.com/2021/12/04/us/… (6/7)

And then a huge increase after the start of the invasion. So, it's not really one thing driving gasoline and oil prices: it's domestic and global politics superimposed on a background of COVID recovery. (7/7)