(GASBUDDY) With the summer driving season now underway, the nation’s average price of gasoline has fallen 3.9 cents from a week ago to $3.51 per gallon, 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 price of diesel has fallen 3.4 cents in the last week and stands at $3.88 per gallon.

“While the national average drifted lower last week as oil prices cooled off, the drop may be temporary. OPEC+ agreed Sunday to additional production cuts, while Saudi Arabia is going above and beyond and cutting July production. As a result, oil prices are likely to see upward pressure as global supplies, which have remained tight, promise to become even tighter as a result,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Last time OPEC+ agreed to cut production, it led to a temporary rally in the price of oil, but as global oil demand hasn’t been as strong as expected, the cut failed to hold oil prices up. OPEC+ and Saudi Arabia are likely hoping that the rise in oil prices will stick longer this time, as the Saudi economy relies on oil prices north of $81 per barrel. It’s likely that, as a result of the production cut, oil prices could rally this week, pushing gasoline prices higher as early as mid-week. How long any rise in gas prices lasts is up in the air, but I do not yet believe motorists need to be worried. Any rise in average prices should be fairly small, and we’re still extremely unlikely to make a run at record prices anytime soon.”

With a weekend agreement that further cuts oil production from OPEC+, oil prices were solidly higher in early trade Monday, but off the $75/bbl high seen in electronic trading Sunday evening. As of press time, a barrel of West Texas Intermediate crude oil was $73.68, up $1.94 per barrel from last Tuesday’s $71.92 per-barrel fetch. Brent crude oil was also in the black, trading up $1.96 per barrel to $78.09, over $2 higher than last Tuesday’s $75.98 per barrel start. OPEC+ met to agree to extend production cuts into 2024, while leading-producer Saudi Arabia voluntarily cut 1 million barrels for July—a cut that can be extended on a monthly basis as long as the Kingdom feels it necessary—in a bid to boost the price of oil to levels it feels is sustainable for its massive budget. While the weekend meeting likely will boost the price of crude going forward, it failed at being harmonious, with African countries apparently pushing for new baseline quotas in 2024, even as they struggle to ramp up production to their current quotas. Saudi Arabia is essentially “taking one for the team,” as Russia continues to provide lip service, while desperately needing to fund its own budget amidst war.

Last week’s report from the Energy Information Administration showed a large build of 4.5 million barrels for crude oil inventories, as imports surged by 1.37 million barrels per day, while the SPR fell 2.5 million barrels. U.S. commercial crude oil inventories now stand nearly 11% above last year but remain 2% below the five-year seasonal average. Gasoline inventories slipped by 200,000 barrels, while distillate inventories rose by 1 million barrels. Implied gasoline demand, a proxy for retail demand, fell nearly 400,000 bpd to 9.1 million barrels per day. Refinery utilization saw a modest rise of 1.4 percentage points to reach 93.1%, the highest level of 2023 thus far.

According to GasBuddy demand data driven by its Pay with GasBuddy™ fuel card, U.S. retail gasoline demand saw a 2.3% fall last week (Sun-Sat). Broken down by PADD region, demand fell 3.2% in PADD 1, fell 2.1% in PADD 2, fell 0.7% in PADD 3, rose 1.5% in PADD 4, and fell 3.5% in PADD 5.

The most common U.S. gas price encountered by motorists stood at $3.39 per gallon, unchanged from last week, followed by $3.49, $3.29, $3.19, and $3.59 rounding out the top five most common prices.
The median U.S. gas price is $3.39 per gallon, down 2 cents from last week and about 12 cents lower than the national average.
The top 10% of stations in the country average $4.73 per gallon, while the bottom 10% average $2.93 per gallon.
The states with the lowest average prices: Mississippi ($2.93), Texas ($3.05), and Louisiana ($3.06).
The states with the highest average prices: California ($4.80), Hawaii ($4.71), and Washington ($4.64).

The most common U.S. diesel price stood at $3.69 per gallon, down 30 cents from last week, followed by $3.79, $3.99, $3.89, and $3.59 rounding out the top five most common prices.
The median U.S. diesel price is $3.79 per gallon, unchanged from last week and about 9 cents lower than the national average for diesel.
Diesel prices at the top 10% of stations in the country average $4.97 per gallon, while the bottom 10% average $3.13 per gallon.
The states with the lowest average diesel prices: Texas ($3.26), Louisiana ($3.44)