Wading into the oil market can seem as clear as a barrel of West Texas Intermediate Crude. Prices for future contracts of oil can fluctuate at the same time New Englanders are seeing gas prices move just one way. We explain.
But first, here’s what else is going on:
- With a full-fledged regional war, President Trump may have entered his most dangerous phase yet, writes the Globe’s James Pindell. The Pentagon says some 140 US troops have been wounded so far, and Canada called shots fired at a US Consulate in Toronto a “national security incident.” (CBC)
- Boston got revenge on winter yesterday, breaking a century-old high temperature record. Here’s today’s forecast.
- Cape residents who want to own the land beneath their mobile homes have spent five years battling an investment firm — and are awaiting a court’s final decision.
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TODAY’S STARTING POINT
We still may not know exactly why we are in this war, but we are becoming aware of how it is affecting parts of our lives, including some of the power for our electricity and heat, and the gas in our cars.
I asked Globe business columnist and newsletter colleague Larry Edelman to parse some of the peculiarities of the petroleum industry, a prime topic with shipments stopped from the war-torn Persian Gulf.
David: Let’s start at the gas station. Why are prices at the pump still going up (to a Massachusetts average of $3.41 on Tuesday) while oil futures are going down, at least temporarily?
Larry: Gas stations set prices based on what they expect to pay for their next delivery, not the cost of the fuel already in their storage tanks. When crude futures spike dramatically — as they did after the start of fighting in the Persian Gulf — retailers react within a day or two, sometimes within hours. Some change prices more than once a day.
When oil prices fall, pump prices do, too — but at a slower rate. Selling gas is a low-margin endeavor — a couple of pennies per gallon after the station pays shipping, credit card processing fees, and other expenses. Owners make more money [from] their convenience stores or car washes.
If much of our gas is not from the Middle East, why are prices here affected by faraway events?
Petroleum is a global market. Prices are driven by worldwide supply and demand. The United States isn’t an island unto itself. Domestic producers don’t sell their oil at a discount to American refiners out of patriotism. They sell at the market price. If a US supplier can get $85 a barrel on the world market, it’s not going to sell to a Houston refinery for $70.
(Readers, catch more on the types of oil the United States produces and the types its refineries handle, in this explainer.)
What are other costs of this oil disruption we wouldn’t necessarily think of?
A sustained rise in crude prices can cause ripple effects that touch everything from supermarket items to airfares to mortgage rates.
Higher oil prices raise transportation costs for fresh produce, push up fertilizer costs that feed into meat prices, and inflate the cost of the petroleum-based plastic packaging that wraps much of what’s on store shelves.
Jet fuel accounts for 20 to 30 percent of an airline’s operating expenses. If prices stay high enough for long enough, ticket prices will also rise.
The war has nudged up mortgage rates, which had dropped below 6 percent for the first time since 2022 just before the US-Israeli attacks began. Investors have sent interest rates back up on concern that the surge in oil prices will increase inflation. The average rate on a 30-year home loan rose to 6.09 percent on Tuesday from 5.99 percent on Feb. 27, according to Mortgage News Daily.
Meanwhile: A deleted tweet from the US energy secretary sent oil markets on another wild ride. (WSJ)
Read: The war is affecting consumers in many ways
Subscribe to Larry Edelman’s Trendlines newsletter here.
🧩 7 Across: Proceeded | ☀️ 48° Chance of showers
POINTS OF INTEREST
Sniff, sniff: South Portland has nearby beaches, great neighborhoods, and is close to great restaurants. But the Maine community has something else, too — and it’s not good.
The breaking point: Local leaders, amid dire budget constraints, say they’ve already passed that point — and they are pleading for state help.
Surprise! What reveals itself after the snow melts? The dog poop. Lots of it. These removal services are scooping up the business.
No pot of gold: Investors are fighting over a St. Patrick’s Day auction for the site of a failed Southie redevelopment plan.
Price-buster: Marijuana prices have been taking a nosedive. What comes next?
Off health care? Enrollment in Rhode Island’s state health exchange fell 20 percent as monthly premiums doubled.
Coyote shooting? That’s what a 59-year-old Cohasset man told police he was doing from the second floor. He was arrested after fatally shooting his wife’s 14-year-old dog, Lise, in the driveway.
Kendric Price: It has been seven years since this popular youth mentor and high school basketball coach was gunned down on his childhood street. Police say the investigation is still open and active.
Imprisoned because of their race: This small exhibit of letters and photographs has an outsize importance — it displays the United States’ WWII imprisonment of Japanese Americans for no reason but their race, at Harvard’s Houghton Library.
Paralympics: Wheelchair curler Stever Emt’s path ran from drunk driver to three-time Paralympian. (NPR)
BESIDE THE POINT
☘️ Authentically Irish? Here are the places where the city’s Irish chefs and bartenders go for a taste of home. Plus, Boston welcomes another strain of Gaelic music.
🏴 Meanwhile, in Scotland: This writer found his roots on a walk through a 280-year-old Highlands battlefield where Bonnie Prince Charlie’s dreams met their end.
💌 Love Letters: “While I was away on a trip, my girlfriend broke up with me.”
👞 Presidential shoes: Who knows why Trump is obsessed with the $145 leather oxfords — and is giving them to everyone? (WSJ)
🍝 On the menu: Want the porchetta or the parm? These are the dishes that Boston restaurants can’t take off the menu.
🧭 Overlooked no more: Do you know about New England’s daring, courageous women explorers?
🛏️ Did you know? Here’s why hotels tuck their sheets so tightly. (Mental Floss)
Thanks for reading Starting Point.
This newsletter was edited by Heather Ciras and produced by Ryan Orlecki.
❓ Have a question for the team? Email us at startingpoint@globe.com.
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Dave Beard can be reached at dave.beard@gmail.com. Follow him on X @dabeard.