economy
Trump is slightly over-optimistic on gas prices
Addressing business leaders this week, President Donald Trump argued that the economy was “roaring.” He added that gasoline prices, which are at four-year highs, will be “going down very substantially.”
TL;DR
- Gasoline prices are at a four-year high, a 50% increase from the previous year.
- High gas prices are weakening approval ratings for President Trump and Republican members of Congress.
- President Trump expects gas prices to fall substantially due to the likely reopening of the Strait of Hormuz and global oil supply restoration.
- Historical data shows a correlation between West Texas Intermediate crude prices ($100-$110/barrel) and retail gasoline prices ($4.00-$4.50/gallon).
- The cost of crude oil is approximately $2.60 per gallon at $105 WTI, making up about 60% of the retail price, with refining, distribution, and taxes making up the rest.