Gas Prices Rebound On Oil Market Volatility: AAA – Fox Business | CarTailz

Consumers saw prices at the pump rise again, but the AAA says that’s not likely to last long. (one)

After falling for several weeks, gas prices have slowly started to rise again, AAA reported Monday.

The national median price for gasoline rose to $3.80 a gallon, up four cents from the week before. The sudden price hike was due to volatility in the oil market, AAA said.

Oil prices fluctuated on concerns that cuts in Russian oil production could result in a tightening of global supply.

But news that China has instituted another COVID-19 lockdown could signal a potential economic slowdown for “the world’s largest oil-consuming nation” and prevent further price increases at the pump, according to the AAA.

“The oil market, like the stock market, hates negative headlines, no matter how speculative,” said Andrew Gross, spokesman for the AAA. “And that’s why we’re seeing the price of oil fall back above $90 a barrel. More expensive oil usually translates into more expensive gasoline, but the recent COVID-related news out of China may curb this increase.”

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Biden announces initiatives to lower gas prices

In October, President Biden announced the release of an additional 15 million barrels of oil from the emergency reserve, saying it would lower gas prices and boost domestic oil production. The decision is part of the government’s 180 million barrel drawdown announced earlier this year.

Biden has also targeted oil and gas companies for the $100 billion in revenue they have generated over the past six months. Last week, Biden said at a news conference that oil companies would have to invest their record-breaking profits to cut costs to Americans and increase production, or pay additional taxes on those profits.

Biden said if those companies pass on their earnings from the past six months to consumers, gasoline prices could fall another 50 cents.

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Consumers are also facing higher costs for financing car purchases, according to the analysis

It’s not just gasoline prices that are going up. The Federal Reserve last week announced its fourth 75 basis point rate hike this year. Economists said interest rates are likely to rise again this year as inflation remains well above the Fed’s 2% target.

According to Edmunds, interest rates paid on auto loans rose to 5.7% in the third quarter of 2022, the highest rate since the third quarter of 2019. Rising borrowing costs and rising car prices have put some popular car models out of reach for many Americans, according to a recent analysis by auto search engine iSeeCars.

New car prices are up around 29% in August compared to August 2019, and used car prices are up 52% ​​over the same period.

However, revenue hasn’t kept pace, up just 13% in August compared to August 2019. As a result, from August 2019 to August 2022, new car affordability fell by 13.3% and used car affordability fell by 26.7%.

“Due to supply chain bottlenecks and increased demand, soaring prices for new and used cars have outpaced income growth,” said Karl Brauer, executive analyst at iSeeCars.

“People still need to replace their vehicles, so the resulting drop in affordability means buyers are either taking longer loan terms and paying higher interest rates, spending less money on a down payment, or even forgoing the type of car they originally wanted cheaper model to make ends meet,” Brauer continues.

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