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Don't look now, but increases at the gas pump are on the way.
Over the past 10 days, both wholesale gasoline and crude oil prices have increased in response to Saudi Arabia, Iran, United Arab Emirates and Nigeria. These nations are key members of OPEC and they have helped to cut crude oil delivery by 1.2 million barrels per day.
Less supply with no change in demand means higher prices, naturally.
According to Steve Levine at the WSJ, there's often a 10-14 day time lag between the time that wholesale gasoline prices move and that movement shows up at the local gas station.
Since gas prices have fallen from their August highs, many Americans have used their "spare money" to buy stuff, propelling the economy forward.
If gas prices rise over the next few weeks, expect mortgage rates to face downward pressure in response.
Wholesale Gasoline Prices Rise, Cost At Pump Could Follow SuitSteve Levine, Wall Street JournalOctober 28, 2006http://online.wsj.com/article/SB116199425629706674-search.html?KEYWORDS=wholesale+gas&COLLECTION=wsjie/6month
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator call 513-443-2020.
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