National gas price average ticks up despite lack of demand

National/World

(GasBuddy) For the second straight week, the nation’s average gas price has gone up, rising 2.3 cents from a week ago and stands at $3.29 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 is down 5.5 cents from a month ago and 97.5 cents per gallon higher than a year ago. The national average price of diesel has risen 0.9 cents in the last week and stands at $3.57 per gallon.

“Oil prices have remained stubbornly strong, touching nearly $80 per barrel last week, pushing gasoline prices higher even as U.S. gasoline demand starts to struggle. Some of this is typical seasonal weakness, but the lack of demand is likely enhanced by omicron cases surging and Americans who are just a bit more hesitant to get out right now,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “In addition, unrest in Kazakhstan, the 18th largest oil producer, is likely leading to impacts on oil production, while continued unrest in Libya also worries markets and overpowers the seasonal drop in gasoline demand. Without improvement or stability in oil producing countries, we’re likely to continue to see upward pressure on oil prices.”

OIL PRICES
Crude oil prices were trading slightly lower in early Monday trade after rallying to touch $80 per barrel last week for the first time since early November. A barrel of West Texas Intermediate crude oil was down 22 cents to $78.68 per barrel, still up over $4 from last Monday’s open at $74.83. Brent crude oil was also trading slightly lower in early Monday trade, down 23 cents to $81.52 per barrel, also some $4 per barrel higher than last Monday’s $77.47 level. As unrest has unfolded in OPEC+ producer Kazakhstan and continues in Libya, oil markets have grown concerned that production could be impacted even as demand weakens slightly seasonally and with an uptick in global Covid cases due to the Omicron variant.

According to Baker Hughes, last week’s U.S. rig count was up 2 rigs to 588, and was 228 rigs higher than a year ago. The Canadian rig count was up by 51 to 141, or 24 more than a year ago.

OIL AND REFINED PRODUCT INVENTORIES
It was a doozy of a goodbye to 2021, with the Energy Information Administration showing U.S. crude oil inventories fell 2.1 million barrels to end the year 8% below the five year average, but was more than made up by a massive 10.1 million barrel rise in gasoline inventories, which now stand just 3.4% lower than a year ago, and distillate inventories, which surged 4.4 million barrels. Implied gasoline demand plummeted to 8.17 million barrels as stations had refilled their underground storage tanks the week prior ahead of the holidays. Refinery utilization was up just 0.1 percentage point to 89.8%, a number that could weaken in the months ahead as demand struggles and refiners begin maintenance.

FUEL DEMAND
According to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand fell again last week (Sun-Sat), likely due to seasonal challenges with some concern about the surge in Omicron cases baked in. Nationally, weekly gasoline demand was down 1.1% from the prior week, while demand rose 0.8% in PADD 1, fell 2.4% in PADD 2, fell 3.8% in PADD 3, fell 3.0% in PADD 4 and rose 0.4% in PADD 5.

GAS PRICE TRENDS
The most common U.S. gas price encountered by motorists stood at $2.99 per gallon, unchanged from last week, followed by $3.09, $3.15, $3.19 and $2.89 rounding out the five most common prices.
The average cost at the priciest 10% of stations stands at $4.37 per gallon, up 2 cents from a week ago, while the lowest 10% average $2.78 per gallon, up 4 cents from a week ago.
The median U.S. price is $3.15 per gallon, an increase of a penny from last week and about 14 cents lower than the national average.
The states with the lowest average prices: Texas ($2.87), Oklahoma ($2.89) and Arkansas ($2.91).
The states with the highest priced states: California ($4.63), Hawaii ($4.27) and Washington ($3.92).

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