The national average price for a gallon of gasoline has fallen 0.8 cents per gallon over the last week to $2.83 per gallon, according to GasBuddy data compiled from more than 10 million individual price reports. The average price of diesel also fell, shedding 0.2 cents to an average of $3.18 per gallon.
“With a muted response from OPEC to President Trump’s exhortation via Twitter that OPEC do something to reign in high oil prices, we may see energy markets rally as concerns grow that Iran’s sanctions effective in November may pose more a challenge to global supply than anticipated,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “Oil prices jumped to fresh highs last night on reaction to the chilly reception to Trump’s concern, with several oil ministers downplaying the rise in oil prices. Moving forward, with Iran’s oil essentially out of reach, gas prices may not see the typical decline we had been expecting as recently as the last two weeks as new concerns emerge about the tightrope balance some oil producing countries are hoping for- pushing supply down as global demand rises. That’s not going to be good news for motorists.”
An OPEC meeting over the weekend in Algeria confirmed that the cartel would not act in any meaningful way to increase production output in the face of a one million barrel per day anticipated shortfall once U.S. sanctions on Iran are fully implemented by November 4. The decision by OPEC to stay the course came on the heels of President Trump’s tweet Friday requesting oil producers act to back-fill lost barrels, raising the specter of U.S. defense in the region. Not surprisingly, the energy commodities complex has responded this morning with bullish bets pushing Brent crude oil up above the $80 resistance level by $1.75 a barrel to $80.54. WTI crude oil is also gaining significant traction, up 2% to $72.23, its highest trade since Tuesday, July 10.
Should the current trends continue and the fall in Iranian exports persist, some analysts are betting the return of $100 oil as early as the end of October. This assumption is in not par disconnected from the growing belief, in some quarters, that OPEC lacks the spare capacity to bring extra barrels on line to meet the looming global oil deficit. If as expected, U.S. oil inventories fall in the EIA weekly report due Wednesday, this week could mark the start of an energy super-cycle, in which prices rise dramatically, bringing fuel prices for the ride.
States with the lowest average prices: Mississippi ($2.51), Alabama ($2.51), Louisiana ($2.53), South Carolina ($2.55), Texas ($2.57), Tennessee ($2.57), Arkansas ($2.58), Virginia ($2.61), Missouri ($2.62) and Oklahoma ($2.65).
States with the highest average prices: Hawaii ($3.71), California ($3.63), Washington ($3.34), Alaska ($3.26), Oregon ($3.23), Idaho ($3.18), Nevada ($3.17), Utah ($3.08), Pennsylvania ($3.04) and Connecticut ($3.00).
