Gas prices hit highest level since 2014

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(GasBuddy) The nation’s average gas price has jumped 5.2 cents from a week ago and stands at $3.25 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 up 7.5 cents from a month ago and $1.08 per gallon higher than a year ago. The national average price of diesel has risen 10.4 cents in the last week and stands at $3.45 per gallon.

“Last week saw oil prices advance to their highest in seven years, with a barrel of West Texas Intermediate crude oil surpassing the critical $80 per barrel level. The nation’s gas prices were also pushed to their highest since 2014, all on OPEC’s decision not to raise production more than it already agreed to in July,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “The OPEC decision caused an immediate reaction in oil prices, and amidst what is turning into a global energy crunch, motorists are now spending over $400 million more on gasoline every single day than they were just a year ago. The problems continue to relate to a surge in demand as the global economy recovers, combined with deep cuts to production from early in the pandemic. If Americans can’t slow their appetite for fuels, we’ve got no place for prices to go but up.”

OIL PRICES
Crude oil’s rally continued into a seventh day with a barrel of West Texas Intermediate crude oil jumping $2.38 per barrel or 3% to $81.76 in early morning trade, a fresh seven year high from last week’s $78.34. Brent crude oil was also up $1.93 per barrel or 2.3% to $84.32, up from last week Monday’s $81.97 level. With OPEC last week deciding against an additional rise in oil production to meet rising demand, supply will likely remain tight. OPEC had agreed in July to raise oil production by 400,000 barrels per day every month until 2022, when production will ultimately return to pre-Covid levels. With natural gas prices and inventories remaining tight, crude oil prices will likely continue to be under buying pressure.

According to Baker Hughes, last week’s U.S. rig count rose by 5 to 533, and was 264 rigs higher than a year ago. The Canadian rig count rose by 2 to 167, or 87 more than a year ago.

OIL AND REFINED PRODUCT INVENTORIES
According to the Energy Information Administration, crude oil inventories saw a modest gain last week, rising 2.3 million barrels, but remain about 7% below the five year average for this time of year, and are nearly 15% lower than a year ago. Gasoline inventories saw a healthy rise as well, posting a 3.3 million barrel gain and now stand just 1% below the five year average for this time of year. Distillates were the sore spot last week, posting a small 400,000 barrel decline, but they’re still about 11% below the five year average for this time of year. Refinery utilization rose 1.5 percentage points to 89.6%, or on par with seasonal levels for this time of year. Domestic oil production also saw a slight boost of 200,000 barrels per day and now stands at 11.3 million barrels per day, or close to 2 million barrels lower than pre-Covid levels.

FUEL DEMAND
According to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand fell for a second straight week, in line with expectations for autumn. Nationally, weekly gasoline demand was down 1.7% from the prior week, while demand fell 2.3% in PADD 1, fell 3.1% in PADD 2, rose 0.1% in PADD 3, fell 2.3% in PADD 4 and rose 1.3% in PADD 5.

GAS PRICE TRENDS
The most common U.S. gas price encountered by motorists rose to $3.09 per gallon, up 10 cents from last week, followed by $2.99, $3.19 and $3.15.
The average cost at the priciest 10% of stations stands at $4.20 per gallon, down 2 cents from a week ago, while the lowest 10% average $2.77 per gallon, up 6 cents from a week ago.
The median U.S. price is $3.14 per gallon, up 7 cents from last week and about 11 cents lower than the national average.
The states with the lowest average prices: Oklahoma ($2.80), Mississippi ($2.89) and Texas ($2.89).
The states with the highest priced states: California ($4.41), Hawaii ($4.09) and Nevada ($3.87).

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