Asphalt prices, which had largely flat-lined in the last 12 months, were shocked back to life in March by a run-up in oil prices fueled by the recent political turmoil in the Middle East. Highway contractors are guessing at whether hard-to-predict asphalt prices will continue to follow oil in upcoming months, something that doesn’t always happen.
Asphalt prices are not only tied to light crude oil. They also follow heavy crude supply—which tracks differently than light crude—and demand tied to federal, state and local transportation funding. Given the current emphasis on reining in spending, heavy budgetary pressure could tip the transportation market back into a recessionary status.