AAA: Gas prices pushing upward in New Year

Gas prices around the Mid-Atlantic region continued to climb higher throughout the busy holiday travel weekend and first full week of 2017.

The New Year brings gas price increases of up to seven cents in some areas of Virginia. Today’s national gas average is $2.37 per gallon, inching upward in the last week largely due to market reactions to last fall’s OPEC deal. Pump prices increased by three cents on the week, by 17 cents per gallon on the month, and are up by 38 cents on the year.

“Locally, gas prices have continued to climb, with some areas as much as seven cents higher than last week,” said Tammy Arnette, Senior Public Affairs Specialist for AAA Mid-Atlantic. “The price of oil and high demand for gasoline over the New Year’s holiday weekend contributed to increases.”

At the close of Friday’s formal trading session on the NYMEX, West Texas Intermediate (WTI) crude oil closed up 27 cents over last week to settle at $53.99 per barrel. Crude has closed above $52 each day this week. Both crude oil benchmarks closed out the year posting the largest annual gains since 2009, with Brent gaining 52 percent and WTI gaining 45 percent to close the year.

These gains can largely be attributed to the OPEC agreement, a deal brokered by OPEC and non-OPEC countries to cut crude oil production by 1.8 million barrels per day in an effort to rebalance the global oil supply.

Moving into 2017, retail gasoline prices will continue to hinge on the ability of cartel countries to successfully implement oil production cuts, but retail averages are likely to increase leading up to the summer driving season as seasonal refinery maintenance gets underway this spring.  In addition, traders will continue to monitor whether participating countries adhere to the OPEC agreement and the rate at which U.S. gasoline production increases.