Like lower prices at the pump? Don't get too used to them, experts warn
For most of the summer, the oil industry threw consumers a bone. Pump prices incrementally dipped from punitive highs nearing $6 per gallon in June to $3.96 in mid-September.
But don't expect that meager bonus to continue, experts predict.
"We do think that gas prices are going to go back up. By how much, we don't know yet," AAA spokeswoman Molly Hart said Thursday.
On June 13, a gallon of regular in the metro area hit an all-time high of $5.90, then started dwindling. By July 11, the region was paying $5.49 a gallon and feeling lucky.
Last Monday, gas bottomed out to a giddy $4.17 as oil analysts sounded the alarm that the streak was over.
How did it start? When gas prices spiked, "many people changed their driving behavior," Hart said. "That meant driving less often, short distances, combining errands. That helped prices go down, because it's all about supply and demand."
However, the invasion of Ukraine, COVID-19 fallout, economic conditions such as inflation and the latest X Factor - hurricanes - will also affect global oil prices, she said.
One positive for drivers is the shift to a cheaper winter fuel blend. But an explosion at an oil refinery in Oregon, Ohio, on Sept. 20 could limit production and increase costs in the region, Hart said.
Also in play is who's buying oil products, noted Argonne National Labs' Steven Przesmitzki, interim division director for transportation.
"Refineries optimize to take the most efficient use of the barrel to make money," Przesmitzki said. With winter coming, refineries are ramping up production of heating oil, which requires less processing than gasoline, and that affects prices.
So, will pump pain cause a shift in consumer demand for battery-powered cars?
It could happen, said Consumer Guide Automotive Publisher Tom Appel. "This is the first time affordable and at least accessible electric vehicles have been made available, and it's lit a fire under interest and demand for EVs.
"Sales are climbing faster than anyone thought they would. Right now, no manufacturer seems to be able to build enough EVs."
In 2021, the EV share of the U.S. market was 5%. "This year we could hit 12% market share," said Appel, who lives in Palatine.
Domestic auto giants such as GM have committed to build only electric light-duty vehicles by 2035, he explained. Ford has split into two divisions, one for gas-powered favorites and a second for EVs, with vehicle and battery manufacturing plants coming in Tennessee and Kentucky.
Meanwhile, the auto industry is still suffering pandemic and related supply chain malaise. And White House incentives to spur domestic production of computer chips necessary for cars won't solve things overnight, the Palatine resident noted.
"Chip manufacturing takes forever," Appel said. "To build a chip from start to stop takes about six months. To add a factory takes three years."
That means the scarcity of new cars won't resolve itself for months. But that's improving.
"The day supply of vehicles on the ground at the worst part of the chip and supply shortage was 800,000 vehicles available for sale in showrooms nationwide," Appel said. Typically, that total is closer to 3 million, and currently it's at 1.2 million.
"It's still very hard to get a car. The last estimate I heard was from (Toyota North America executive) Jack Hollis, who said things will return to feeling very normal by the end of 2023."
Gridlock alert
Expect delays on Ogden Avenue near Hinsdale this week as traffic will be shifted from the east to the west side of the road between County Line Road and Grove Avenue. The configuration will remain through October as part of the Illinois tollway's rebuild of the Ogden and I-294 interchange.
Your voice
Reader Phil Taylor is frustrated about delays in fixing Roselle Road between Route 72 and Wise Road in Schaumburg and Hoffman Estates.
"Do you know why the Roselle Road repair has come to a standstill?" Taylor asked. "I haven't seen a worker in a month, and having two lanes blocked is infuriating."
Cook County spokeswoman Brittany Hill explained "the project was paused while the Department of Transportation and Highways awaited approvals for additional work items to be included as part of the project. Crews will be back on-site by Monday."
• Got a transportation comment or question? Drop an email to mpyke@dailyherald.com.