While oil prices (BZ=F, CL=F) have risen during the last week, gas prices (RB=F) have remained relatively steady despite the summer travel season picking up. Patrick De Haan, GasBuddy head of petroleum analysis, joins Market Domination to give insight into oil and gas prices and Biden's potential leverage over gas prices.

"According to our GasBuddy demand data, we've seen real demand at the pump essentially be under 9 million barrels a day. And compared to back in 2019 and 2018, that's very soft. Traditionally, we'd see numbers somewhere more in the mid to upper 9 million barrel-a-day range. So I think demand is still soft and I think to your point, Covid is still playing a role. We saw a lot of revenge travel in 2022. That's when international travel really wasn't possible. Last year we saw gasoline prices lower. I think we still saw revenge travel domestically last year. I think this year we're still seeing some of that revenge travel," De Haan tells Yahoo Finance.

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This post was written by Nicholas Jacobino

Video Transcript

Temperatures might be rising across much of the country but gas prices are not, at least not yet.

Joining us.

Now, Patrick Dehon Gas buddy, head of petroleum analysis.

Patrick, always great to see you.

We have seen not today, but we have seen oil prices start to creep back up over the past couple of weeks.

What's the sort of lag time where we're maybe going to see it make its way into gasoline prices?

Yeah.

And, and great to be back with you.

Um, you know, we've seen gasoline prices stabilize that is, they probably would have fallen under 10 or 15 cents.

But as you mentioned, the price of oil has heated back up here up about $8 a barrel in the last few weeks.

And so instead of causing gas price to immediately go up, some of this is simply gas price aren't going to go down as much and then go right back up.

So I think we'll probably level out here somewhere right around the 3 43 45.

There are still a majority of states that are falling.

But I do expect that would probably wrap up here in the next few days and then we'll start to see prices stabilize.

So for now, I know it kind of funky that oil prices go up.

Don't expect gasoline prices to make much of a jump yet.

We'll have to see oil prices climb a little bit more to see the national average start to have more of a reaction.

And Patrick also in election year, gas price is a huge election issue.

Anything, any levers we might get might expect to get pulled to affect gas prices, to the downside most likely.

But uh you know, sometimes we see these things in election year, maybe the S pr the strategic petroleum Reserve is tapped, unlikely.

I understand to do that this year.

But all in all does Biden have any leverage here.

Not a whole lot.

I think talk is cheap and that may be something that the administration utilizes that is they may hint at the potential S pr reserve just because the psychology of potentially offering the S pr may be enough to keep oil prices under somewhat of a pressure, somewhat under balance.

But as you mentioned, I don't think that's a tool that the government will necessarily utilize.

It also sets a dangerous precedent to use a strategic reserve as a strategy price reduction tool instead of the strategic petroleum reserve.

The good news is though the S pr has continued to now see increases.

The Department of Energy had accelerated the plan to buy back oil of course, that's now fizzled with oil prices north of $80 a barrel.

But again, the president really doesn't have a whole lot of mechanisms here, especially considering Mother Nature.

We are starting to see some areas out in the Atlantic, in the Gulf of Mexico or Florida that just kind of uh make us remember that hurricanes supposed uh hurricane season is rather going to be very active and that could be a wild card.

Yeah, definitely could Patrick.

I, I'm also curious for your take on demand right now.

You know, we're kind of past the height of the revenge travel phenomenon, but it feels like demand for travel is still relatively strong here.

What are you seeing?

What kind of patterns are you seeing?

And especially I'm curious about regional patterns.

Well, uh regionality is certainly very interesting out in the west where uh gasoline prices, arguably California, Oregon, Washington to be more expensive.

We tend to see a little bit more of demand destruction there.

Now, I would certainly classify demand so far this summer as being a bit soft.

That is while the Department of Energy, the EI A is uh metric that is implied demand measures how gasoline moves towards the pump.

It doesn't measure how gasoline is dispensed at the retail level.

That's where gas data comes in and shines.

Now, according to our gas buddy demand data, we've seen real demand at the pump essentially be under 9 million barrels.

A day.

And compared to back in 2019 and 2018, that's very soft.

Traditionally, we'd see numbers somewhere more in the mid to upper 9 million barrels a day range.

So I think demand is still soft and I think to your point, COVID is still playing a role.

We saw a lot of revenge travel in 2022.

That's when international travel really wasn't possible.

Last year, we saw gasoline prices lower.

I think we still saw revenge travel domestically last year.

I think this year we're still seeing some of that revenge travel.

But I think now with airfares down compared to last year, a lot of that is not on the roads but in the skies overseas.

Uh obligatory question about OPEC Plus here.

Uh We don't expect any big changes on a month to month basis, but sometimes they happen.

Anything you see that could move the needle with OPEC plus.

Well, you know, again, going back to talk is cheap.

We've seen OPEC, you know, come out with some salacious statements about potentially, you know, hinting at further cuts.

But uh I think OPEC is pretty happy with the way oil prices have bounced back up.

Now, global oil inventories do remain on the tighter side of things.

OPEC is probably hoping that summer driving season really comes in stronger than affected, but, you know, OPEC certainly could drop comments to keep oil prices range bound.

We've kind of been in this now.

85 excuse me, 75 to $85 a barrel without much of a breakout.

Um I think the interesting thing, by the way about those OPEC meetings here a couple of weeks ago was highlighting when oil production would start coming back online.

So kind of interesting development there.

All right, we gotta leave it there, but thank you for stopping by here, Patrick.