Gas price declines have begun to slow in the last week with the national average unchanged at $2.85 per gallon today according to GasBuddy data compiled from over 10 million price reports from over 135,000 stations in the last week. While average gas prices remain lower than a month ago, prices are set to begin rising, following the recent surge in oil prices.
“Going into the July 4 holiday, I can’t remember the last time oil markets were so active. Oil has surged over 10% just in time for summer’s busiest travel holiday, costing motorists over $1 billion more than last year,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “All the ingredients exist for the national average to inch closer to $3 per gallon, just in time for the second half of the summer. Undoubtedly, the second half of the summer will be pricier than the first, thanks to OPEC’s production increase falling short of expectations, sanctions to be placed back on Iran by November and falling U.S. oil inventories. And to rub some salt in the wound, hurricane season is still upon us, adding more guesswork to where gas prices might spend the second half of the summer. Make no mistake, it won’t be pretty, not nearly as “pretty” as the first half of the summer. Be ready for volatility and likely higher prices at the pump in July and August.”
Meanwhile, Saudi Arabia signaled it may increase production over the weekend, at the request of President Trump, but markets are skeptical, especially since OPEC had recently agreed to a tamer production rise of 600,000 barrels per day. Watch for any increase- if there is one, it may undermine OPEC and oil prices, but would be a boon for motorists as it would likely mean some relief at the gas pump for the second half of the summer.
Data out from the Energy Information Administration last week showed one of the largest weekly declines in recent memory, further boosting oil prices. Oil inventories fell nearly 10 million barrels as U.S. exports surged to a record 3 million barrels per day. Gasoline inventories rose 1.2 million barrels and are above average for this time of year, a good sign for motorists. Refineries, meanwhile, ran at an eye-popping 97.5% of their capacity. There’s also some new talk of a mothballed refinery in the U.S. Virgin Islands that may restart as soon as 2019 to meet rising demand for refined fuels given Venezuela’s economic collapse. Total U.S. oil production remained unchanged to just under 11 million barrels but may rise again soon as oil prices remain strong.
Largest weekly price changes: Michigan (+13 cents), Ohio (+4 cents), Arizona (-4 cents), Wyoming (+4 cents), Illinois (+3 cents), South Carolina (+2 cents), West Virginia (+2 cents), Rhode Island (-2 cents), Kentucky (+2 cents) and Connecticut (-2 cents).
Lowest average gas prices: South Carolina ($2.51), Mississippi ($2.52), Alabama ($2.52), Louisiana ($2.57), Tennessee ($2.57), Arkansas ($2.57), Missouri ($2.58), Oklahoma ($2.58), Virginia ($2.61), Kansas ($2.64).
Highest average gas prices: California ($3.65), Hawaii ($3.65), Washington ($3.42), Alaska ($3.38), Nevada ($3.31), Oregon ($3.27), Utah ($3.18), Idaho ($3.16), Connecticut ($3.08) and Arizona ($3.05).
Gas prices will begin to move higher in more states in the week ahead, following on the heel’s of the dramatic rise in oil prices, but any long-term rise isn’t guaranteed as Saudi Arabia may raise production following President Trump’s pleas.
