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    Thursday, December 26

    Decoding the Decline: Unraveling the Seasonal Forces Behind Fluctuating Gasoline Prices

    Karine Jean-Pierre claims “families are seeing lower prices on everyday items from gas to groceries.” That is a lie. Since Biden took office, prices are up by 17.6% and the nationwide average for gas remains $0.86/gallon higher.

    In recent times, there has been a notable decline in gasoline prices, sparking widespread speculation about political motives, especially as we approach an election year. While the correlation between lower gasoline prices and political advantages is a common belief, it is crucial to dispel the misconception that President Biden’s actions are the driving force behind this descent. The reality, as illustrated in the chart below, is that gasoline prices at the pump remain 20% above their 10-year average for this period.

    The predominant factor influencing gasoline prices is the underlying price of oil, with a significant seasonal aspect contributing to the fluctuations. According to Robert Rapier, as explained on OilPrice.com, gasoline prices typically experience a decline between August and November each year.

    To comprehend these seasonal shifts, it is essential to delve into the intricacies of gasoline blending, a process influenced by environmental regulations set by the Environmental Protection Agency (EPA). In my previous role at ConocoPhillips, where gasoline blending was a primary responsibility, I gained insights into the dynamics driving these changes.

    The EPA strategically regulates gasoline blends to minimize emissions, particularly those contributing to smog. One key parameter in this regulation is the Reid vapor pressure (RVP), a specification that varies with temperature. Evaporation rates increase at higher temperatures, leading the EPA to impose lower RVP limits during the summer months. For instance, a common limit in much of the U.S. during summer is 7.8 pounds per square inch (psi).

    As September approaches, the transition to cold weather blends takes place, allowing for higher RVP limits, reaching as much as 15 psi in certain locations. This shift significantly affects gasoline production costs, particularly concerning the inclusion of butane.

    Butane, with a high RVP of 52 psi, becomes a more viable component in fall and winter blends due to the higher allowable vapor pressure. Its cost-effectiveness, often trading at a $1/gallon discount to crude oil or gasoline, makes it an attractive addition to boost gasoline supplies.  Continued below Goldco Ad

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    During the summer, stringent RVP limits make blending significant amounts of butane impractical. However, as limits increase in the fall, more butane can be blended, reducing production costs and increasing supply. This strategic adjustment aligns with the decline in demand after the high-demand summer driving season, contributing to the usual fall decrease in gasoline prices.

    While external factors like hurricanes in the Gulf of Mexico or geopolitical events can occasionally disrupt these seasonal trends, the current decline adheres to the typical pattern of falling gasoline prices in the fall, irrespective of it being an election year.

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    It is crucial to acknowledge that this perfect storm of decreased prices and increased supply comes to an end in spring when RVP specifications are tightened in May. This results in heightened costs and reduced supplies, just in time for the summer driving season. Thus, the cyclical nature of these seasonal shifts is a more accurate explanation for the current decline in gasoline prices than political maneuvering.

    To Sum it all up, understanding the interplay of environmental regulations, seasonal blending adjustments, and market dynamics provides a comprehensive view of the factors influencing gasoline prices. By dispelling the notion of political manipulation, we can better appreciate the cyclical patterns that govern the ebb and flow of gasoline prices throughout the year.

    Major Points Discussed:

    • Gasoline prices are declining, leading to speculation about political motives in an election year.
    • President Biden’s actions are not the primary cause of falling prices; instead, the underlying oil price and seasonal factors play a significant role.
    • Seasonal changes, particularly in gasoline blending regulated by the EPA, contribute to the fall in prices between August and November each year.
    • The EPA adjusts Reid vapor pressure (RVP) limits, allowing for the inclusion of cost-effective butane in fall and winter blends, reducing production costs and increasing supply.
    • The decline in gasoline prices is part of a typical seasonal pattern, influenced by environmental regulations and market dynamics, rather than political influences.

    Comments – Threads – Links

    • Biden’s economic advisor Jared Bernstein claimed on Fox News Sunday that gas prices spiked as a result of Russia’s invasion of Ukraine. In fact, the oil and gas price spike began right after Biden’s election in November, 2020. Traders knew a war on fossil fuels was coming. – David Asman (Chart is above in article)
    • JUST IN: Karine Jean-Pierre says Biden doing such a great job: “This holiday season, families are seeing lower prices on everyday items from gas to groceries.” But the RNC quickly pointed out that since Biden took office, prices are up by 17.6%. WATCH – Simon Ateba – clip at Twitter
    • Biden energy advisor Amos Hochstein: “We’re at the lowest [gas] prices now since Thanksgiving of 2020.” That’s a pathetic, embarrassing lie. When Biden took office, the nationwide average was $2.39/gallon. Today, it is $3.28/gallon. – Clip see below

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