How low will gas, grocery prices go in Minnesota?

As gas prices go, so go grocery prices. Technically, grocery prices are driven more by diesel prices than by regular unleaded the trends are often similar. According to this Alpha News article, the news is good for Minnesota drivers. It reports that "On Monday, the state's average price for regular unleaded stood at $3.86 per gallon, according to AAA, down from $4.41 a month ago." That's a 55-cent drop in a month.

With the U.S.-Iran MOU to be signed this Friday, the Strait of Hormuz is expected to open. That Strait is where 20+ percent of the world's oil flows through. With the amount of oil freighters backed up in that little chokepoint, oil hasn't been getting to market. Once the blockade is over, there's likely to be a glut of supply. That's why it isn't difficult to picture a gallon of gas dropping below $3.00 a gallon by Labor Day.

Once President Trump's blockade is over, the next big thing that the Administration will attack will be energy infrastructure, aka pipelines and refineries. Energy Secretary Wright, Interior Secretary Burghum and EPA Administrator Zeldin are poised to attack that after the midterm elections.

President Trump gave reporters an update at Monday's G7 Summit:

President Trump's update happened during his bilateral meeting with French President Macron. If President Trump's update is accurate, oil prices will quickly drop.
Minnesota drivers had already seen prices ease in recent days, continuing a downward trend from recent highs that first began with the outbreak of the conflict in Iran in February. On Monday, the state’s average price for regular unleaded stood at $3.86 per gallon, according to AAA, down from $3.87 the previous day and $3.97 a week ago. A month ago, the average was $4.41 per gallon. Despite recent declines, prices remain significantly higher than a year ago, when Minnesota drivers were paying about $2.94 per gallon on average.
Further, the U.S. is producing 13.6 million (13,600,000) barrels of oil per day. When the new infrastructure comes online, that figure is expected to hit 15,000,000 barrels per day. That isn't SWAG (a Statistical Wild Ass Guess). That's the estimate from Phil Flynn, the lead energy analyst for Price Futures Group. Finally, when that new infrastructure comes online, the break-even price will likely drop. This needs to happen. We need greater productivity, greater profitability for the oil companies and cheaper gas at the pump for the consumers.

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