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Business Insider
19 hours ago
- Business
- Business Insider
Why filling up your tank is likely to cost more pretty soon
Oil prices have proved volatile following the US strikes on Iran's nuclear facilities — and you could soon be paying more to fill up your tank. West Texas Intermediate and global benchmark Brent crude were sharply higher in Asian trading on Monday before losing ground later in the day. That reversal may please President Donald Trump, who posted on Truth Social "Everyone, keep oil prices down." He also called on the Department of Energy to "drill, baby, drill" — even though it does not do so. Fluctuating oil prices could result in more pain for consumers' wallets. Denton Cinquegrana, chief oil analyst at OPIS, thinks that retail gasoline prices will "move higher" in the near term. Despite rising geopolitical tensions, he told Business Insider that oil prices hadn't caught up with levels reached last year. "The probability of prices staying here and not reacting to the next headline is pretty low." He expected US gas prices to approach $3.30 a gallon this week, up from about $3.22 on Monday. The price this time last year was $3.44. Diesel averages $3.68 a gallon, per the AAA, compared with $3.80 a year ago and could also jump, Cinquegrana said: "A spike in diesel prices could hit consumers just as hard as higher gasoline prices as the transport of goods becomes more expensive." Spending power dented Households in the US and Europe spend between 3% and 10% of their incomes on energy, which includes gasoline, heating oil, gas, and electricity, Carsten Brzeski, global head of macro at ING Economics, told BI. "This means that the increase in oil prices has a direct impact on consumers, denting their spending power," he said. "When it comes to gasoline, the impact is very imminent as companies pass higher market prices immediately on to their customers." Brzeski said that energy price rises could hit consumers "like a tsunami." Supply question "For consumers it all boils down to whether we will see a material disruption in oil supplies from the Middle East," said Clayton Seigle, senior fellow in the energy security and climate change program at the Center for Strategic and International Studies. "The more the war with Iran escalates, the greater the chances this will occur, and higher crude prices will be passed on in the form of higher fuel prices like gasoline and diesel," he told BI. "However, oil prices have not increased much since the fighting began, because oil traders are sanguine about the risk of disruption." The US produces about 13 million barrels of oil a day and imports a further 3 million a day from Canada, lowering the risk of significant supply shortages. The US also imports oil from countries including Mexico, Saudi Arabia, Iraq, and Brazil. Lower-income pain Ryan Sweet, chief US economist at Oxford Economics, said the US economy had slowed and was vulnerable to further setbacks such as a sudden rise in oil prices. He told BI that lower-income households in the South are especially vulnerable to oil-price shocks because they spend more on gas as they drive more, have less of a "savings cushion" than peers in the North, and fuel makes up a larger share of their household spending. That would leave them with less money to spend on other things. Sweet said "it's a lot" for consumers between limp wage growth, a faltering labor market, tariffs, and now the prospect of higher gas prices.
West Australian
a day ago
- Business
- West Australian
What the US strikes on Iran could mean for world oil prices
International energy traders are braced for disruptions as Iran's parliament endorsed the closure of the Strait of Hormuz, a crucial choke point for the world's oil supply, with the ultimate decision resting with the country's leadership, according to reports in Iranian state media on Sunday. Any move to impede the flow of shipping traffic out of the Persian Gulf would probably lead to a spike in oil prices — and higher prices at the gas pump. But how high they will go and for how long is an open question that depends largely on what happens around the Strait of Hormuz. About 20 per cent of the world's oil and natural gas shipments pass through the narrow stretch of water between Iran to the north and Oman to the south. Secretary of State Marco Rubio told Fox News on Sunday that it would be 'economic suicide' and a 'terrible mistake' for Iran to disrupt movement through the strait. He urged China, which depends heavily on oil and gas from the region, to pressure Iran to avoid that move. 'It would be, I think, a massive escalation that would merit a response, not just by us, but from others,' Rubio said. After the US bombing of three of Iran's nuclear facilities Saturday, Iranian Foreign Minister Abbas Araghchi said on Sunday that there would be 'everlasting consequences' for an attack that he called 'extremely dangerous, lawless and criminal behaviour'. It remains unclear whether Iran will attempt such a blockade or use mines or missiles to interrupt the flow of commerce through the region. Before the US bombed Iran, analysts were already warning that a closure of the strait could push oil prices well past $US100 a barrel. That would be more than a 30 per cent increase from where they stand today. Analysts caution, however, that Iran is unlikely to deliver on the threat and note that the nation has vowed to close the strait in the past and never successfully done so. Most of the oil that goes through the strait is delivered to Asia, and Iran is wary of alienating its ally China, in particular. Iran may also lack the firepower to successfully block the strait. Regardless of what happens at the Strait of Hormuz, the instability in the region following the strikes will probably send oil prices surging - at least temporarily — as soon as international energy trading resumes late Sunday night. 'It's likely there will be panic buying at the open,' said Denton Cinquegrana, chief oil analyst at OPIS, a Dow Jones company. Meanwhile, Iran has been taking actions to interfere with energy shipments through the strait by other means, including jamming GPS signals of tankers in the area. The maritime intelligence firm Windward reports that 23 per cent of vessels in the area — some 1600 ships — experienced signal jamming on Sunday, up sharply from Friday, when 970 ships were impacted. Such actions, however, are generally already factored into current oil prices, which remain in the mid-$US70s per barrel of oil. A Windward spokesman said it was too early to say whether shipping patterns through the strait have already changed after the U.S. strikes. As market watchers remains sceptical of Iran's ability to shut down the strait, some are predicting that any price spikes for Americans will be short-lived. 'Crude oil will rise, but absent some decisive Iranian response, I would think prices will not hold their gains,' said Simon Lack, portfolio manager at the Catalyst Energy Infrastructure Fund. 'The US is energy independent so [it's] less exposed to higher oil prices than most other countries.' American officials have worried for decades about the vulnerability of the Strait of Hormuz. Over the years, the US has wound down its long-running reliance on Middle Eastern oil and grown into the world's largest oil producer, now buying just a small percentage of its oil from the region. Still, disruption of such a key shipping lane would reverberate throughout the world economy. If Iran defies expectations and manages to impose a blockade, prices could rise quickly. JPMorgan analysts warned earlier this month that a full-blown military conflict and a closure of the strait could hike prices as high as $US130 per barrel. That would probably push prices at the pump in the U.S. up by more than $1 from where they are now. The Washington Post
Axios
2 days ago
- Business
- Axios
News Corp CEO Robert Thomson's contract renewed through 2030
News Corp, the parent company to dozens of global newspapers, including the Wall Street Journal, on Sunday said it renewed the contract of its longtime chief executive, Robert Thomson, through 2030. Why it matters: The price of News Corp's voting shares has increased 140% under Thomson's leadership. Catch up quick: Thomson was named CEO of News Corp in 2013, when its publishing assets were spun out from its entertainment assets. News Corp has since successfully overhauled its business for the digital era. By the numbers: Digital accounted for 50% of the company's total revenue as of its 2024 fiscal year, compared to around 20% in 2014, the company noted in a regulatory filing announcing the extended contract. The period between fiscal 2021 and 2024 have been the company's most profitable, it added. Under Thomson's leadership, News Corp subsidiary Dow Jones has dramatically expanded its enterprise business, mostly through the acquisitions of professional data and analysis products, such as OPIS and Base Chemicals. Zoom in: Thomson has been aggressive in pushing News Corp to adapt to the digital era by brokering deals with major tech platforms, while simultaneously advocating for reform to protect publishers. Thomson famously struck a licensing deal with Facebook for its news content in 2019, after years of criticizing the tech giant for not paying publishers. Most recently, News Corp struck a landmark licensing deal with OpenAI that's reportedly been valued at more than $250 million over five years. Months later, News Corp sued Perplexity, an AI search engine, for copyright infringement. What they're saying: "Rupert and Lachlan Murdoch have adroitly sculpted a company that is passionate and principled and purposeful, and it is a profound privilege to serve as Chief Executive," Thomson said in a statement provided to Axios. "For journalists, for authors, for society, for those who strive and aspire, these are times of immense challenge and boundless opportunity. Our leadership team is acutely conscious of an unwavering responsibility to our shareholders, and we are grateful for the sterling efforts of all our colleagues as we pursue profitability and seek to realise our vast potential." "Robert has been instrumental in News Corp's growth and transformation, and his vision and leadership are extremely important as the company continues to navigate this era of rapid change," said News Corp chair Lachlan Murdoch. "Robert has created exceptional shareholder value, orchestrated a meaningful transformation of our asset base, and made strategic investments in growth drivers like Dow Jones, Digital Real Estate Services and Book Publishing. He is a crucial voice in the fight for publishers and journalists in the digital age, and a strong advocate for intellectual property rights. I look forward to his continued leadership," he added. Zoom out: The extension makes Thomson, 64, one of the longest-serving chief executives of a major global news brand.
Yahoo
4 days ago
- Automotive
- Yahoo
3 Big Numbers: Costco's fueling ambitions
This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. 3 Big Numbers is a weekly column that looks at a few key details from around the c-store industry. While Costco has offered gas alongside some stores since 1995, news last week that it plans to open its first standalone gas station drew a lot of attention. The location in Mission Viejo, California, is expected to feature a 17,185-square-foot gas canopy with 40 fueling positions. It's unclear if Costco is planning to test more such locations, but if it does, the impact on c-stores, which sell about 80% of all fuel as things stand, could be significant. In this week's '3 Big Numbers,' we dig into why Costco's latest fuel announcement is such a big one for the convenience retail industry. The average difference between Costco fuel prices and market rates in California. One of the main reasons so many people fuel up at Costco is the members-only pricing. Like the fueling sites offered at its warehouses, the standalone gas station will also require customers to be Costco members — which means it will likely share that pricing perk as well. How much of a discount are we talking here? The Oil Price Information Service (OPIS) reported that the average difference between Costco prices and market price for gas in California was 53 cents. For customers seeking out lower prices, 53 cents per gallon is a big deal. Separate OPIS data showed that the average fuel markup in the U.S. was less than 40 cents in 2024, so if Costco starts putting more standalone gas stations in areas where a full store wouldn't make sense, convenience retailers could face a big new threat. The number of Costco gas stations offering expanded hours. While its standalone gas station is the new, eye-catching model, Costco has also been making the gas stations alongside its stores more customer friendly by expanding fueling hours. The company announced in a March earnings call that its gas stations would be opening an hour early, and some would be closing an hour later as well. 'We did see some demand from the commuters, both at the early hours and the evening hours, so I think that that's going to be a real benefit to those folks,' said President and CEO Ron Vachris during the company's Q2 earnings call in March. The expanded hours were one of several factors credited with recently fueling two of its highest-ever weeks for gallons sold. The number of paid Costco members. How many customers might be attracted to an expanded Costco gas offering? The retailer has 79.6 million paid members. While that's the global total, more than 600 of the company's 905 warehouses are in the U.S. If membership is proportional, then there are at least 54 million paid Costco members in the U.S. That means about one in seven U.S. residents is a card-carrying Costco customer. While Costco's warehouse locations may not be convenient for regular fill-ups for many of those customers, an expansion of this standalone gas station concept could quickly change that. Recommended Reading Costco to open first standalone gas station Sign in to access your portfolio
Yahoo
19-02-2025
- Automotive
- Yahoo
Gas prices are headed higher, and a 'ripple effect' could make it worse in certain regions
Gasoline prices are likely headed higher in the weeks ahead as the impact of refinery maintenance and outages, particularly in California, trickle through the market ahead of the yearly switch to more expensive summer blends. On Wednesday, the national average price for gasoline hovered around $3.16 per gallon, $0.04 higher than a month ago and $0.11 lower than exactly one year ago, according to AAA data. 'The national average has inched higher, driven primarily by sharp gas price increases on the West Coast, where refinery maintenance and outages have created a ripple effect in neighboring states, pushing prices higher in many communities,' said Patrick De Haan, head of petroleum analysis at GasBuddy. De Haan anticipates that the national average for gas will rise by $0.25 to $0.60 between now and mid-April, with the costliest driving fuel remaining along the West Coast. Meanwhile, Tom Kloza, OPIS global head of energy analysis, forecasts "gasoline rising $0.20 to $0.33 per gallon more before peaking somewhere between Easter and Cinco de Mayo." Refineries have been undergoing planned seasonal maintenance, putting pressure on supply. Meanwhile, a Feb. 1 fire at the Martinez refinery in Northern California forced the shut-down of nearly all its units. The outages come ahead of the annual switch to more expensive summer fuel blends, with western states making the changeover first. California already has the most expensive gasoline in the US due to fees and taxes tied to green initiatives. Gasoline averages in the Golden State jumped $0.41 over the past month to $4.85 per gallon, about $0.20 higher than a year ago. Washington statealso saw prices at the pump jump roughly $0.22 over the past month to $4.15 per gallon. Meanwhile, Nevada's one-month increase of $0.23 has the state average hovering at $3.89. Despite a spike at the pump in the short term, Kloza forecasts retail gas prices will move lower in the second half of the year. "US gas price averages will largely be well below $3 per gallon in the last third of 2025 unless we see a hurricane impact the US Gulf Coast," said Kloza. The Energy Information Administration predicts gasoline will decrease by $0.11 per gallon this year, or 3%, with another 6% drop expected in 2026. "The lower US gasoline prices are primarily a result of lower crude oil prices, as well as decreasing gasoline consumption in 2026 because of increasing fleetwide fuel economy," a January EIA report said. On Wednesday, oil futures jumped 1% to extend gains from the prior session after delegates from the Organization of Petroleum Exporting Countries and its allies, including Russia, said the group was considering delaying its output raise for a fourth time. West Texas Intermediate crude (CL=F) hovered near $72.50 per barrel, while Brent futures (BZ=F) traded above $76. Traders have recently been assessing the impact a potential peace deal in Ukraine could have on the markets if Western sanctions against Russia are eventually lifted. "If sanctions on Russia are eased, that certainly could put downward pressure on oil, and of course President Trump has promised to lower energy prices. So there are huge implications," GasBuddy's De Haan told Yahoo Finance on Tuesday. Demand worries amid the threat of a US tariff-induced trade war have also dampened prices. In a note earlier this month Goldman Sachs said prices could fall in the medium term "because persistent broad tariffs would weigh on global GDP and oil demand." Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
