Gasoline prices across the United States continued to move higher over the last week, rising in 46 states to a national average of $2.35 per gallon today, the highest level since June as prices continue to play catch up to crude oil prices that edge closer to $50 per barrel.
“For the third straight week, gasoline prices have accelerated with the national average at its highest level in over eight weeks, driven by rising oil prices as inventories continue to tighten and concern over Venezuela lingers,” said Patrick DeHaan, senior petroleum analyst for GasBuddy. “Looking behind us, however, gas prices have remained in a relatively tight range for the last year, staying within a 30-cent wide range. While we’re likely to see gas prices continuing to move higher in the week ahead as they catch up to oil, we’re unlikely to break out of the well-established rut in the national average which has kept prices between $2.12 and $2.42 for the last 15 months.”
Data last week from the Energy Information Administration (EIA) showed a drop of 1.5 million barrels in crude oil inventories, a smaller drop than was anticipated by analysts, but bringing total inventories to their lowest since December 2016. Inventories have continued to plunge from their peak of 536 million barrels in late-March to the present level of 481 million barrels. In addition, gasoline inventories fell 2.5 million barrels, 4.4% lower than the level of a year ago.
States with the largest weekly increase in average prices versus a week ago: South Carolina (+7 cents), Iowa (+7 cents), New Jersey (+7 cents), Georgia (+7 cents), Virginia (+6 cents), Alabama (+6 cents), Nebraska (+6 cents), New Mexico (+6 cents), Arkansas (+6 cents) and Louisiana (+6 cents).
The states with the cheapest average gasoline prices are: Mississippi ($2.09), South Carolina ($2.09), Alabama ($2.09), Missouri ($2.11), Arkansas ($2.11), Oklahoma ($2.12), Tennessee ($2.13), Louisiana ($2.16), Texas ($2.16) and Virginia ($2.17).
Oil prices finished last week with a barrel of West Texas Intermediate (WTI) crude oil at $49.52/bbl, just 48 cents away from the critical level of $50. While Venezuela continues to be an area to monitor, concerns have cooled off in recent days after President Trump hinted that for now sanctions would be only targeted at individuals. Should sanctions be placed on Venezuela’s oil industry, oil markets would likely climb, as Gulf Coast refiners scramble to find oil supply to replace oil from Venezuela. Meanwhile, Baker Hughes reported on Friday the number of active oil rigs in the U.S. dropped by 1 to a total of 765.
Gasoline prices are likely to continue to their widespread increase in the days ahead, with gasoline prices in the volatile Great Lakes likely to rise in the next few days, which may contribute to a 2-3 cent rise in the national average in the week ahead. Prices are also likely to continue advancing in the West Coast, Rockies, Gulf Coast, Midwest, Southeast and Northeast.