The increase is due to a decline in gasoline supplies, relatively strong demand and continued refinery maintenance. Today’s national average price of $1.98 per gallon is the highest average in two months.
Relatively low oil costs continue to provide drivers with year-over-year savings at the pump, and consumers are saving 45 cents per gallon compared to this same date last year.
Projected reductions in global oil supply and Iran’s slower-than-expected return to the global oil market reportedly contributed to both Brent and West Texas Intermediate (WTI) closing out the week at 2016 highs. At the close of Friday’s formal trading session on the NYMEX, WTI was up 94 cents and settled at $39.44 barrel, which marked the fifth week of oil price increases. WTI crude has jumped 50.48 percent since a 2016 low close of $26.21 on February 11. According to the U.S. EIA, domestic production declined from year-ago levels for the first time in more than four years, largely due to lower-than-expected crude oil prices.
“As weather improves, people are hitting the road and using more fuel, while refineries are producing less gasoline,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Unfortunately, despite recent increases, there’s still room for prices to go even higher as past spring increases have been 50 cents or more.”
Prices typically move higher at this time of year as gasoline demand begins to increase and refineries conduct seasonal maintenance. This year’s refinery maintenance season is characterized by lower-than-expected prices for crude oil and ample supplies, which should help keep pump prices relatively low compared to recent years. Prices in some regions may move significantly higher in the near term due to fluctuations in local supply and demand associated with continued maintenance and preparations for summer-blend gasoline in advance of the June 1 deadline for retail facilities to sell the cleaner blend.