GasBuddy: Demand for gas slows, price relief could be on the way

National/World

(GasBuddy) The nation’s average gas price has risen 0.6 cents per gallon from a week ago to $3.18 per gallon Monday according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average now stands 3.5 cents higher than a month ago and $1.02 per gallon higher than a year ago. The national average price of diesel has risen 2.0 cents in the last week and stands at $3.29 per gallon.

“Motorists have seen average gas prices edge slightly higher over the last week, even as the price of oil saw selling pressure. This leads me to believe that the tide may soon turn on gas prices, so long as we don’t see hurricanes target the country. In addition, GasBuddy data showed a decline in gasoline demand last week as we inch towards the end of the summer driving season, a time when demand softens,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “With the factors that drive prices higher now softening, I’m hopeful that in the next few weeks, we’ll start to see average gas prices declining. However, motorists shouldn’t get too excited yet – larger declines will likely not come until late September and October, as we transition back to cheaper winter gasoline.”

OIL PRICES
Oil saw a bumpy week last week as West Texas Intermediate crude oil took a notable loss, beginning last week at $73.15 per barrel but this week finds its start well below that level at $65.62, down some $2.66 per barrel this morning alone. Brent crude oil was also seeing heavy losses, down $2.52 per barrel to $68.18 after fetching nearly $75 per barrel a week ago. The driving force behind the drop is the rise in new Covid cases, likely spurred by the Delta variant, with China now seeing a large surge in cases. The surge in global Covid cases will likely eat into global growth and the recovery in petroleum demand, and with the increase in production from OPEC, oil prices are likely to sag as a result. In addition, U.S. oil inventories saw an unexpected jump last week.

According to Baker Hughes, last week’s U.S. rig count rose by 3 to 491, and was 244 rigs higher than a year ago. The Canadian rig count rose by 3 to 156, or 109 more than a year ago.

OIL AND REFINED PRODUCT INVENTORIES
Last week’s government report showed a surprising 3.6 million barrel jump in U.S. oil inventories, which still stand 6% lower than the five year average for this time of year, while oil production was unchanged from the prior week at 11.2 million barrels per day. Gasoline inventories plummeted 5.3 million barrels and now stand nearly 8% lower than a year ago, while distillate inventories saw a modest 800,000 barrel gain, but still stand about 23% lower than a year ago. Implied gasoline demand surged to 9.78 million barrels, a weekly rise of 451,000bpd, with 2021 demand now about 10.1% higher than 2020. Refinery utilization saw a slight rise of 0.2 percentage points to 91.3%.

FUEL DEMAND
According to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand fell slightly after reaching its highest level of 2021 last week. Nationally, weekly gasoline demand fell 1.6% from the prior week, while demand fell 2.4% in PADD 1, fell 1.8% in PADD 2, fell 2.3% in PADD 3, fell 3.8% in PADD 4 and rose 1.9% in PADD 5.

GAS PRICE TRENDS
The most common U.S. gas price encountered by motorists was $2.99 per gallon, unchanged from last week, followed by $2.89, $3.09 and $2.79.

The average cost at the priciest 10% of stations stands at $4.23 per gallon, up 2 cents from a week ago, while the lowest 10% average $2.71 per gallon, unchanged from a week ago.

The median U.S. price is $3.00 per gallon, up a penny from last week and about 17 cents lower than the national average.

The states with the lowest average prices: Mississippi ($2.77), Louisiana ($2.79) and Texas ($2.82).

The states with the highest priced states: California ($4.37), Nevada ($4.04) and Hawaii ($4.04).

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