Fuel prices continue to decline as supply issues continue and inflation fears rise. Both crude oil and natural as rates dropped for Thursday as other markets saw declining values.

Brent crude oil dropped 0.60% to $89.950. Natural gas fell much more precipitously, though, with a decline of 4.23% down to $1.8019. This continues a trend of natural gas that started back in November of last year. That was when prices started to decline, and they have stayed down during almost that entire period.

The major factor keeping rates low and keeping the industry from seeing much profit is the low demand for gas. As the winter months are in the past and spring breaks out throughout much of the world, there simply is not much need for natural gas, especially compared to colder times of year.

Many refineries have slowed down their production and are simply sitting on reserves, waiting for orders to come in. There was some worry that fighting in the Middle East would increase demand for gas, but that has not been the case so far.

Russian oil refinery attacks, on the other hand, have hit right at Russia’s energy sector, as they were designed to. However, Russia Is not going to its normal suppliers for oil these days. In solidarity with its partners and against western coalitions, Russia is buying oil from China and other eastern powers. This is partly due to the eastern countries’ desire to push western money out of their economies and partly because many countries have issued sanctions against Russia for its attacks on Ukraine.

US Inflation and Oil Prices

The United States Consumer Price Index numbers are in after a report on Wednesday, and inflation is not looking good. The inflation rate rose by 3.5% over the last year, which is higher than analysts expected. Inflation is also up from February and looks to be still rising.

The Federal Reserve is issuing no interest rate cuts now as a result. Those cuts are expected in the fall of this year.

Oil prices can sometimes increase when inflation is high, as it may be seen as a valuable commodity, but the oversupply issues are going to keep the prices low for a while longer.