For the first time since Memorial Day, the national average has seen a weekly rise, adding a penny to $2.86 per gallon on Monday according to GasBuddy data compiled from over 10 million price reports from over 135,000 stations in the last week. The rise comes as oil prices continue their run of strength amidst high demand that continues to eat away at oil inventories.
“As gas prices saw their highest level on July 4 in four years, President Trump continues to try to push OPEC to produce more crude oil, but so far, it hasn’t materialized into much anything. Gas prices have inched up in a majority of states and oil prices remain comfortably above $70 per barrel, with no significant relief any time soon,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “In addition, with a brief reminder of hurricane season as Beryl formed, there may be more worries that in the weeks ahead the Atlantic could churn out more storms, thus more risk of disruption in regards to oil or refinery infrastructure. There’s little downward pressure on oil prices as we remain in the midst of the summer driving season, and unless we see credible evidence to suggest OPEC or other countries are producing more oil, we will likely continue to see gas prices drift higher.”
Oil prices remain above the key $70 per barrel threshold, even as President Trump has appealed to OPEC and Saudi Arabia to produce more oil to meet high demand. However, the President’s own policy, such as reducing fuel mileage requirements under CAFE standards passed by President Obama could lead to higher demand and ultimately higher prices in the decades to come. In fact, it is possible that Saudi Arabia, the UAE and Kuwait have already begun increasing oil production, though Saudi Arabia holds the key to calming oil markets with 1-2 million barrels of spare capacity while the other two have just fractions of that available.
Data from the Energy Information Administration last week, delayed by July 4, showed a small 1.2 million barrels rise in U.S. oil inventories, though they remain under the five year average, while gasoline inventories fell 1.5 million barrels. Implied gasoline demand remained strong, according to the EIA, up 1.2% over the same period last year. All regions saw gasoline inventories drop with the exception of the Rockies, where gasoline inventories rose a modest 300,000 barrels. Refinery utilization fell 0.4%, but remained high at 97.1% of total capacity.
Largest weekly gas price changes: Delaware (+9 cents), Michigan (-8 cents), Maryland (+4 cents), Pennsylvania (+3 cents), New Mexico (-3 cents), Arizona (-3 cents), North Dakota (-3 cents), California (-3 cents), Nebraska (+2 cents) and Indiana (-2 cents).
Lowest average gas prices: Alabama ($2.53), South Carolina ($2.53), Mississippi ($2.55), Missouri ($2.58), Louisiana ($2.59), Arkansas ($2.59), Tennessee ($2.60), Oklahoma ($2.60), Virginia ($2.63) and Kansas ($2.65).
Highest average gas prices: Hawaii ($3.72), California ($3.65), Washington ($3.42), Alaska ($3.39), Oregon ($3.30), Nevada ($3.23), Utah ($3.17), Idaho ($3.15), Connecticut ($3.07) and Arizona ($3.04).
Gas prices may see another week of relative stability, rising slightly as prices reflect recent strength in oil prices, and volatility may rise as hurricane season comes into focus in late July and August.