“This comes at a time of the year when we do tend to see gas prices increasing,” said Avery Ash, director of federal affairs for the organization. “The expectation for right now is that it’s exerting downward pressure.” For every $10 the price of a barrel of oil changes at the wholesale level, the price of a gallon of gasoline moves about 25 cents, Ash said.
Oil analysts say that even a recession in the U.K. wouldn’t put much of a dent in global oil demand. A bigger factor could be skittish investors continuing to flock to the U.S. dollar. Although oil is a global commodity, it’s priced in dollars, which means a strong dollar means more expensive oil for the rest of the world.
“A stronger dollar and lower treasury yields in response to last night’s vote by Britain to leave the EU have driven gold prices higher and industrial commodity prices lower,” Goldman Sachs analyst Jeffrey Currie wrote in a research note Friday. “This price action is consistent with our view of a stronger dollar putting downward pressure on commodities despite supportive fundamentals.”
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