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Gas prices jump as U.S. exits Iran deal

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After pausing for a week, the national average has resumed its climb, rising 6 cents per gallon in the last week to $2.87, according to GasBuddy’s latest weekly survey of 135,000 gas stations. Average gasoline prices rose in all 50 states last week after oil prices reached $71 per barrel, the highest since 2014, following news of President Trump’s Iran withdrawal. Oil prices then cooled off slightly to end last week.

“Gas prices saw one of the largest weekly increases since Hurricane Harvey in the last week as oil prices continued to surge, leading to sharply higher prices at the pump, putting the U.S. in peril of striking the $3/gallon level for the first time since 2014,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “Some of the factors at play in the rising prices: President Trump’s withdraws the U.S. from the nuclear deal with Iran and oil supplies that have continued to drop as U.S. exports surpass Venezuela—a surprising feat given Venezuela has the largest proven oil reserves in the world. In addition, as money continues to flow into commodities as bets for higher oil prices rise, there’s a strong chance of seeing crude oil prices continue to rally in the weeks ahead, with the odds of hitting $3/gallon nationally now better than 65% just in time for the summer driving season.”

Crude oil prices were back up to start the new week, rising over $71 per barrel Monday morning. In addition to President Trump’s Iran withdrawal, the government reported last week that crude oil, gasoline and distillate inventories all declined. According to the Energy Information Administration, oil and gasoline inventories both fell 2.2 million barrels in the last week while heavier distillate inventories fell 3.8 million barrels. Levels of all three were lower than a year ago led by oil inventories down nearly 89 million barrels in the last year. In addition, refiners input less crude oil into their refineries, operating at an average of 90.4% of capacity with gasoline production slipping to 9.9 million barrels a day, just slightly higher than the 9.78 million barrels of implied gasoline demand per day.

The transition to summer gasoline is now complete and is no longer an active participant in rising gasoline prices, but instead, the continued rise in oil prices due to OPEC’s 2017 production cuts, rising U.S. exports and the situation with Iran are culprits. Oil may continue to move higher in the weeks ahead contingent on the fluid situation with Iran. One of the most important issues to watch: will U.S. allies heed President Trump’s warning to curb Iran’s oil exports by following U.S. sanctions? Effectively, such a move could cut off some flow of Iran’s oil and tip the delicate balance of global supply and demand, leading oil higher.

Looking state-by-state, the largest weekly changes in average gas prices were seen in: Ohio (+15c), Nevada (+12c), Delaware (+11c), Michigan (+10c), Florida (+10c), Wyoming (+10c), Minnesota (+9c), Kentucky (+9c), Missouri (+9c) and West Virginia (+9c).

States with the lowest average gasoline prices: Mississippi ($2.56), Arkansas ($2.57), South Carolina ($2.58), Louisiana ($2.58), Alabama ($2.58), Oklahoma ($2.59), Tennessee ($2.61), Missouri ($2.61), Kansas ($2.63) and Texas ($2.65).

States with the highest average gasoline prices: California ($3.68), Hawaii ($3.63), Washington ($3.35), Alaska ($3.30), Nevada ($3.27), Oregon ($3.23), Utah ($3.18), Idaho ($3.11), Connecticut ($3.06) and Pennsylvania ($3.03).

Arizona is poised to join the $3/gal club as it stands at $2.99 today, while New York sits nearby at $2.98. New Jersey stands at $2.94 as well.

Gas prices will likely continue to rise this week, but likely at a slower pace than the 6-cent rise seen this week.

GasBuddy is a smartphone app connecting drivers with their Perfect Pit Stop. GasBuddy is the leader in crowdsourced information to help drivers find the best gas prices, closest stations, friendliest service, cleanest restrooms, tastiest coffee and much more. GasBuddy is the leading source for the most accurate, real-time fuel prices at more than 140,000 gas stations in the U.S., Canada and Australia.