(GASBUDDY) Average gas prices have fallen for the seventh straight week, posting a 2.5 cent drop over the last week to $2.65 per gallon, according to GasBuddy data compiled from more than 10 million individual price reports covering 135,000 gas stations across the United States. The average price of diesel fell 2.4 cents to $2.98 per gallon.
“For the seventh straight week, the national average price of gasoline has fallen, to a level last seen in March. But just in time for the upcoming holiday, the steak is at high risk of being broken,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “A large refinery explosion in Philadelphia last week may ultimately serve to push gasoline prices higher once we learn more details about how long that facility may be offline. For now, motorists along the East Coast may only see prices rise a few cents as a result, but could see more of a hit should the refinery be down for a long period of time. Furthermore, oil prices have rebounded notably due to increasing tensions between the U.S. and Iran and attacks in the Strait of Hormuz, a key waterway which sees over 20% of global oil supply traversing through the waterway. Whether the upcoming and likely rebound in gasoline prices sticks for long is unknown, but if tempers continue to flare between the two countries, motorists may fall victim to the rocky relationship in the form of higher gas prices. In addition, trade tensions with China have now taken a back seat, but with President Trump meeting President Xi, we may see either more upward pressure on oil if signs of a truce in trade emerge, or downward pressure if the countries move further apart.”
The price of West Texas Intermediate crude oil stood at $57.95 per barrel in early trade Monday morning, up from $52.31 per barrel a week ago after Iran shot down a U.S. military drone and President Trump threatened to respond, only to pull back for the time being. Escalating tensions between the two countries are behind the large jump in crude oil prices versus last week, with Iran’s suspected attack on two oil tankers also in recent memory. Playing less of a role as of late has been the ongoing trade feud between the U.S. and China, but should any positive signs come from the upcoming G20 summit where negotiators are set to meet, oil prices may face further pressure to rise.
The Energy Information Administration in its weekly report last week reported a drop in oil and refined products, with a 3.1 million drop in crude oil inventories, a 1.7 million barrel decline in gasoline inventories and a 600,000 barrel decrease in distillate inventories. Refinery utilization rates rose 0.7% and stood at 93.9%, a recent high water mark. Implied gasoline demand surged to nearly 10 million barrels per day, just as a major refinery was rocked by an explosion in Philadelphia last Friday, likely posing a threat to gasoline prices in that region in the weeks ahead.
At the gas pump, a majority of the nation’s 50 states saw average gas prices fall again in the last week. The most common price in the country remained $2.39 per gallon, while $2.59 was the second most common and $2.49 the third most common. The average price of the top 10% priced stations stood at $3.64 per gallon down from $3.68 a week ago while the bottom 10% priced stations averaged $2.15 and the median U.S. gas price was $2.54.
The national average streak of declining gas prices may end this week as rising oil prices push retail prices higher in the coming days, just as motorists prepare for the July 4 holiday. The Great Lakes states may see prices jump as they tend to do every 1-2 weeks while other states may see slower moves to the upside. Even Pennsylvania and the immediate area around the Philadelphia Energy Solutions refinery are unlikely to see a large spike, but prices are likely to move up as the market digests that a unit at the refinery may be down for months or even years. In addition, in one-week motorists in some states will see gas prices go up following tax increases: Illinois raised its gas tax 19c/gal, Ohio 10.5c/gal and California 5.6c/gal.