(GASBUDDY) The national average price of gasoline has resumed its rally, fulfilling expectations that last week’s declines were likely to be short-lived, according to GasBuddy. The national average price of gasoline rose 6.5 cents per gallon over the last week to $2.21 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 price of diesel has risen 5.8 cents in the last week and stands at $2.52 per gallon.
“The sudden spike in gas prices last week was brought on by a continued rise in the price of oil, which jumped last week to nearly $50 per barrel, the highest we’ve seen since March, when prices collapsed due to COVID-19. While last week’s gas price surge isn’t likely to repeat this week, it could be a sign of things to come in the year ahead,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “A weakening U.S. dollar and vaccine optimism continued to push oil higher last week, along with stock markets. While some are wrongly pointing to the coming shift in the White House as driving up prices, I can assure motorists that what we’re seeing has nothing to do with such a change and everything to do with market optimism that demand will rise, and the weaker dollar which makes oil cheaper to anyone holding non-dollar currencies, putting upward pressure on demand.”
Oil prices were plummeting in early Monday trade as fears of a mutant strain of COVID-19 in the United Kingdom surged, triggering shutdowns in Europe and prompting countries to close doors to air, land and sea traffic from the Kingdom. A barrel of West Texas Intermediate crude oil plummeted some 4.3% to $46.97 per barrel, a $2.13 per barrel drop overnight, nearly the same as last week Monday’s $46.76 level. Brent crude oil was also trading notably lower at $50.11, a $2.15 per barrel or 4.1% drop, nearly the same as last Monday’s $50.16 price. Oil prices traded sharply higher late last week before plummeting Sunday night when markets began to focus on the statement from the U.K. that a mutant strain was discovered.
Last week’s data from the Energy Information Administration showed a 3.1 million barrel drop in crude oil inventories, while gasoline inventories posted a small one million barrel rise and distillate inventories rose 200,000 barrels. In addition, EIA data showed a 375,000bpd rise in implied gasoline demand, likely a lagging indicator from early December. Recent Pay with GasBuddy data has shown a drop in gasoline demand since early December, with the exception of this past weekend, which showed a bright spot ahead of the Christmas holiday. For the week, GasBuddy data showed a 5% weekly rise in U.S. gasoline demand. Refinery utilization fell by 0.8 percentage points to 79.1% of capacity with nearly all five regions seeing lower refinery activity, with the exception of the Gulf Coast.
At the gas pump, gas prices moved higher across a majority of states, but the sharp rise isn’t likely to last into this week with oil’s plunge today.
GAS PRICE TRENDS
-The most common U.S. gas price encountered by motorists was unchanged again at $1.99 per gallon, followed by $2.19, $2.09 and $1.89.
-The average cost at the priciest 10% of stations stands at $3.09 per gallon, up 4 cents from a week ago, while the lowest 10% average $1.83 per gallon, up 9 cents from a week ago.
-The median U.S. price was unchanged at $2.13 per gallon, up 8 cents from last week and about 9 cents lower than the national average.
-The states with the lowest average prices: Mississippi ($1.88), Louisiana ($1.89) and Oklahoma ($1.91), while the highest priced states were Hawaii ($3.21), California ($3.16) and Washington ($2.73).