In times of economic crisis, people often look to the pump to show them how the economy is faring. This Wednesday, analysts reported that oil prices rebounded sharply after weeks of being knocked down by economic uncertainty. Following a three-week slump, oil rallied 4 percent, the best one-day percentage gain since September.
At the pump, retail gas prices continued to fall. According to AAA, Wright Express and Oil Price Information Service, the national average slipped nearly a penny overnight to $2.771/gallon. A gallon of regular unleaded costs 8.3 cents less than a month ago, but is still 34.6 cents more expensive than last year’s numbers.
Government reports revealed an increased demand for both gasoline and big-ticket goods like refrigerators and airplanes. Many investors now think oil is undervalued and a rally in equities markets sparked a parallel rally in crude, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
“I’m not saying the correction is over” in energy commodities, Kloza said. “But people are now saying, ‘I can live with these prices’.”
Oil held its gains even as U.S. stock markets turned lower. Prices kept rising as the Commerce Department reported that orders for durable goods increased 2.9 percent in April, the best showing in three months. The report suggested that the U.S. manufacturing industry was getting stronger, which could lead to more fuel consumption.