After declining for 13 straight weeks, the national average price of gasoline has posted a weekly increase of 0.5 cents to $2.24 per gallon. The rise comes on the heel of oil prices retaking the $50 per barrel level on OPEC and Canadian oil production cuts to start the new year.
“With oil prices back over $50 per barrel, it looks like gas prices in more areas may soon bottom out and start to tick higher. While it doesn’t seem that prices will rise very far, it looks more and more like the lowest price of the year may now be behind us,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “The national average briefly hit $2.22 per gallon last week, but will likely move up slightly or stabilize this week. Gas prices in the Great Lakes saw a noticeable jump last week and tend to see among the earliest trend changes in the country, which may be a harbinger of what’s to come for the rest of us.”
Lingering worries about a global economic slowdown captured traders’ attention to close last week as the nine-day winning streak on energy markets ended with WTI crude oil shedding a dollar per barrel to $51.59, while Dated Brent lost $1.20 to end the week at $60.48. Nevertheless, it was a second week of overall gains with WTI advancing six percent and over seven for Brent, with gasoline spot prices picking four cents on the week and diesel surging ahead ten cents, a sign that retail gas prices across the U.S. will likely stabilize in the near-term or even begin moving higher.
Despite signs of oil production cutbacks from OPEC’s kingpin Saudi Arabia, the growth in Iraqi output and Russia’s apparent slow take up on cutbacks, with only a 300k barrel daily drop since October, left some wondering about the effectiveness of the pledge to reduce daily oil production by 1.2 million daily barrels. This in-the-midst of speculation from some corners, that the U.S. had attained or even exceeded 12 million barrels per day of output, even though the weekly Baker Hughes rig count was down by four units. Chinese government data too may have helped in the cautious note expressed Friday and into the morning today of a half percent drop in growth forecasts from 6.5% in 2018 to 6% for the year ahead.
However, the pessimism that hit markets late last week was not enough to keep average gas prices from rising from their lowest since January 2017. Average gas prices have moved higher in X states, and while 32 states still have at least one station under $2 per gallon, the number of states with prices averaging under $2 has shrunk from 13 to 10.
States with the lowest average gas prices: Oklahoma ($1.87), Arkansas ($1.88), Louisiana ($1.89), Mississippi ($1.90) and Alabama ($1.91).
States with the highest average gas prices: Hawaii ($3.43), California ($3.26), Washington ($2.99), Alaska ($2.91) and Oregon ($2.89).