Omicron variant creating future uncertainty surrounding oil and gas prices

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The statewide gas price average in Texas is $2.91 for a gallon of regular unleaded fuel, according to the AAA Texas Weekend Gas Watch. That price is two cents more than it was on this day last week and is 94 cents more per gallon compared to this day last year. Of the major metropolitan areas surveyed in Texas, drivers in El Paso are paying the most on average at $3.17 per gallon while drivers in San Antonio are paying the least at $2.80 per gallon. The national average price for a gallon of regular unleaded is $3.30, which is two cents more when compared to this day last week and $1.03 more than the price per gallon at this same time last year.

Strong demand from the holidays and optimism in the global market are pushing both gasoline and crude oil prices higher this week. Meanwhile political unrest and pipeline issues overseas could take more than 500,000 barrels of oil per day offline from the global market. This news comes as Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed this week to stick with their plan to add another 400,000 barrels per day of supply starting next month. Market observers note the move by OPEC+ suggests the organization is optimistic demand for crude oil will remain strong despite a growing number of new COVID-19 cases around the globe.

“There are many layers of uncertainty surrounding the Omicron variant and how it will impact crude oil and gas prices,” said AAA Texas spokesperson Daniel Armbruster. “However, market optimism for crude and gasoline demand has been leaning toward the upside, which is why we’ve been seeing slight price increases at the pump.”

Meanwhile, the pre-Christmas fire at the Exxon Mobil Corp plant in Baytown, Texas, is causing reduced output. However, recent reporting indicates the damage was to a non-refining section of the complex. The plant is the nation’s fourth-biggest oil refinery, with the capacity to process 560,500 barrels per day of crude.

Drivers in Texas are paying the lowest gas price average in the country, according to gasprices.aaa.com. Meanwhile drivers in California are paying the most at $4.66 on average for a gallon of regular unleaded.

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