Just a few weeks ago headlines flashed across our smartphones and TV screens about the devastating attack against oil production in Saudi Arabia.
Almost immediately the media’s hype machine was running at full speed with clicks and pageviews at stake.
It wasn’t long before American consumers heard predictions of pump prices increasing 15 to 30 cents a gallon as repairs were undertaken on the other side of the planet.
On Sept. 15, NBC Nightly News reported that “the attack will likely drive up U.S. gas prices” — according to one analyst cited, “by as much as 25 cents a gallon.”
On Sept. 13, prior to the attack, the price of West Texas Intermediate crude oil fell from $57.85 a barrel to $54.85. The attack saw the price spike on Sept. 16 to $62.90.
In a Sept. 16 story, Bloomberg News quoted Jeanette Casselano, a spokesperson with auto club AAA, as saying that U.S. crude oil at $70 would likely lead to $3-per-gallon gas prices.
So what happened? Essentially, nothing.
Looking to preempt higher prices for consumers about 14 months before he stands for re-election, President Donald Trump authorized the release of oil from the U.S. strategic reserve.
Then the price began to return to pre-attack levels. It was at $52.28 on Oct. 8.
“The predictions were not borne out,” said John Corlett, director of public and government affairs for AAA Northeast. “Prices started to stabilize once the reports came out that the facilities should be fully operational by the end of September.”
He also noted that in the Northeast there is a switch to the winter blend fuel that is cheaper to refine than summer blends.
“That blunted the impact,” he said. “Some people were predicting 25-cent hikes, which didn’t bear out in the Northeast or nationally, and 25 cents would have been a big spike for a lot of people. It’s tough to say if (Trump’s announcement) had an impact.”
An examination of AAA price data from suburban markets north of New York City revealed that consumers were spared the pain that was predicted.
In lower Fairfield County, the average price for a gallon of regular gas was $2.729 on Oct. 8 and $2.768 on Sept. 26, which was unchanged from Sept. 19. The price had been $2.821 on Aug. 26. One year ago it was $3.097. In Bridgeport, the average was $2.754 on Oct. 8, $2.779 on Sept. 26 and $2.783 on Sept. 19. On Aug. 26 it was $2.838 and one year ago it cost $3.112.
Across the border in White Plains, the average was $2.85 on Oct. 8, $2.877 on Sept. 26 and $2.882 on Sept. 19. The cost on Aug. 26 was $2.934 and one year ago it was at $3.135.
The lesson is simple: Predictions from so-called experts always need to be questioned — and knee-jerk reactions should be avoided.