The nine-week straight rise in the U.S. average gasoline price has ended for now as the national average held unchanged versus a week ago at $2.84 per gallon according to GasBuddy data compiled from over 10 million individual price reports covering 135,000 gas stations across the United States. The average price of diesel rose 1.4 cents, reaching $3.07 per gallon.
“The seemingly never-ending streak of rising gasoline prices has largely continued unabated across the country over the last week, while the national average saw little change due as prices fell in the Great Lakes. Gas prices continue to drift higher in most states, although the pace has slowed in the last week, but that may end soon as rumors point to an end to U.S. issued waivers that allowed countries to continue buying oil from Iran that may be announced as soon as tomorrow,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “Such a loss of oil in the current environment of OPEC cuts and rising demand would only serve to cause gas prices to continue advancing, something that has repeatedly drawn the scorn of President Trump, but with such a policy change and waivers perhaps ending, it could directly cause another round of gas price increases just as the national average reaches its highest level in months and points to a more painful summer at the pump. With such a policy move, if OPEC fails to increase output to offset the likely drop from an end to Iran waivers, expect oil prices to continue to surge. This will cost Americans billions if the Administration enforces the end to waivers.”
Crude oil prices surged Monday morning on the prospect of an end to U.S. waivers to countries that import crude oil from Iran, suggesting the White House will act to curb Iran’s oil exports, choking the market of needed oil. In early trading Monday, West Texas Intermediate crude oil surged 2.5% to $65.63 per barrel, while Brent crude oil was last seen up nearly 3% to $74 per barrel, new multi-month highs for both the oil benchmarks.
Oil inventories last week moved lower by 1.4 million barrels, while gasoline inventories fell 1.2 million barrels and distillate inventories dropped 400,000 barrels, according to the Energy Information Administration. Refinery utilization, a key measure of how much capacity refiners are operating, rose 0.2% to 87.7% in the last week even as gasoline production dropped. Gasoline inventories now stand some 5% lower than the five-year average, lending support to prices.
Gasoline prices rose last week in over two-thirds of states while noticeable drops occurred throughout the Great Lakes. Average prices fell 9 cents in Michigan, 6 cents in Ohio and also fell in Iowa, Kentucky and Indiana. Florida, which also shares common gas price behavior with these states called price cycling, also saw a drop. Most of these states, however, will likely see prices jump this week as retail prices have fallen under replacement cost. The most common gas price across the country remained $2.69 per gallon, followed by $2.59 and $2.79. The average price of the most expensive 10% of gas prices rose to $3.93 per gallon, while the least expensive 10% rose to $2.43 per gallon.
Gas prices are likely to rise in the Great Lakes states this week while increases will likely throttle back for the first half of the week in many states, while the West Coast may ultimately see some relief from previous refinery troubles. Oil prices and the situation with Iran sanction waivers may alter the future to a small degree, however, a factor to watch in the days ahead.