The national average for a gallon of gasoline has risen 5 cents per gallon in the last week to $2.76 per gallon Monday, according to GasBuddy’s latest weekly survey of 135,000 gas stations. The gain comes as oil prices continue to surge, rising last week to a new multi-year high as global demand outpaces supply and OPEC maintains production cuts.
“Gas price increases gripped 49 of the nation’s 50 states again last week as oil prices continued their upward move to new multi-year highs. In addition, government data highlighted a new record for gasoline demand was breached last week, and we’re not even into the summer driving season yet. The road head at the pump looks quite ominous if that demand number proves common in the coming weeks,” said Patrick DeHaan, head of petroleum analysis for GasBuddy.
“With President Trump’s tweet last week targeting the price of oil, there may be additional scrutiny on oil prices in the coming weeks that bears monitoring. OPEC has been remarkably successful in better aligning supply to demand, draining the crude oil glut, and pushing oil prices to their highest since 2014. While refinery maintenance and the change to summer gasoline largely complete, oil prices remain one of the largest active drivers of gas prices now and likely in the weeks ahead. All signs point to some additional upward movement before prices peak and perhaps drop slightly around Memorial Day into the month of June- all certainly very contingent and subject to any changes from OPEC,” he said.
The price for a barrel of West Texas Intermediate crude oil last week surged to nearly $70, the highest level since oil was in the midst of collapsing in December 2014 as OPEC increased supply. It’s the opposite reason- OPEC production cuts for the last 15 months- that oil prices have continued to surge. Add in high global demand, led by data from the Energy Information Administration last week that showed implied gasoline demand at an all-time high weeks before the start of the summer driving season, and it’s a recipe for more pain at the pump.
In addition, crude oil, gasoline and distillate inventories all dropped in the last week, bringing concerns that demand is exceeding supply. President Trump even weighed in on Twitter last week, calling on OPEC to raise production and bring prices back down. U.S. oil inventories now stand 105 million barrels lower than a year ago, or nearly 20 percent. Refinery utilization also slipped, leading to lower production of refined fuels.
Looking state-by-state, the largest weekly changes in average gas prices were seen in: Michigan (+11 cents), Rhode Island (+11 cents), Ohio (+10 cents), Connecticut (+9 cents), New Jersey (+9 cents), Massachusetts (+8 cents), New Hampshire (+8 cents), New York (+7 cents), Maine (+7 cents) and Utah (+7 cents).
States with the lowest average gasoline prices: Missouri ($2.44), Oklahoma ($2.44), Arkansas ($2.47), Kansas ($2.49), Mississippi ($2.50), Louisiana ($2.50), Texas ($2.51), South Carolina ($2.51), Wyoming ($2.52) and Alabama ($2.53).
States with the highest average gasoline prices: California ($3.56), Hawaii ($3.54), Washington ($3.22), Alaska ($3.20), Nevada ($3.17), Oregon ($3.12), Utah ($3.06), Idaho ($3.00), Pennsylvania ($2.97) and Connecticut ($2.88).
Gas prices are likely to continue rising in much of the country over the next week as retail prices catch up to last week’s rise in the price of oil.