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Crude oil, Omicron, and oil reserve impacting prices at the pump

Published: Nov. 30, 2021 at 11:45 PM EST
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HARRISONBURG, Va. (WHSV) - For the Thanksgiving holiday, drivers saw some of the most expensive gas prices since 2014, but still, people were eager to travel and visit family and friends for the holiday.

AAA forecasted that 1.3 million Virginians would hit the road for Thanksgiving, which was just 5% shy of 2019, pre-pandemic, travel.

“The last couple of weeks, we have seen just a little bit of relief at the pump. Stabilizing or just a drop of a few pennies,” Morgan Dean, “It’s good news, bad news. There are some new concerns about this new [Omicron] variant out there and that’s causing some issues on the crude oil market.”

The price of crude oil makes up 50% to 60% of what people pay at the pump, so Dean said if crude oil prices are high, pump prices will be high... If crude oil prices come down, pump prices will eventually come down, too.

Crude oil was around $80 a barrel for the last few weeks. After news of Omicron, that’s down to $64 a barrel, according to AAA. Dean said these prices are similar to August and September before prices really started to rise.

“We’re seeing this drop because of concerns about COVID starting to affect economies again and there is some worry that could happen,” Dean said. “It’s not necessarily a good thing, but we might see some good things with gas prices out of it.”

Morgan expects that travel for the Christmas holiday this year will be similar to what AAA saw at Thanksgiving, with the possibility of relief at the pump.

“If we continue to see crude oil prices drop, we could see gas prices drop pretty well,” Dean said. “On the flip side of that, if crude oil prices only drop briefly then bounce back up, we could see pump prices stay at a very high level or even climb back up. Or it could be that roller coaster ride with it.”

Last week, President Joe Biden announced his administration will make millions of barrels of oil available from the Strategic Petroleum Reserve in an effort to lower prices at the pump. This effort is in coordination with China, India, Japan, the Republic of Korea, and the United Kingdom.

The average for a gallon of gas in Harrisonburg is $3.29. In Staunton, it is $3.27.

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