Gas prices up despite decreased demand
Today’s national average price of $2.24 is 2 cents less than one week ago, 6 cents more than one month ago and 4 cents less than one year ago. Prices in the Mid-Atlantic and Northeast have moved higher over the past week, which can likely be attributed to the aftermath of Hurricane Matthew’s impact on the Southeast region and that oil prices have closed above $50 every day this week.
“Gas prices in much of the area have climbed a few cents in the last week,” says Tammy Arnette, Public Affairs Specialist for AAA Mid-Atlantic. “Crude oil prices have closed above $50 all week as there are more positive signals that the members of OPEC will sign off on a deal to curb output and that increase can push prices at the pump higher.”
At the close of Friday’s formal trading session on the NYMEX, West Texas Intermediate (WTI) closed up 53 cents from last week to settle at $50.34 per barrel. Crude oil closed above $50 per barrel every day this week and is reaching levels seen a year ago. Attention is now focused on whether the Organization of Petroleum Exporting Countries (OPEC) will alter production in order to influence prices higher. OPEC members are scheduled to have a number of meetings before the end of November in order to identify the details of an output agreement, which has supported the bearish sentiment for crude oil over the past week. Traders will keep a close eye on OPEC negotiations moving forward and will be on the lookout for an oil production framework.
Crude oil prices may face a merry-go-round effect in the next few weeks, especially until OPEC’s final agreement is signed off on. Although OPEC agreed to curb output, the impact of the agreement may not have had the impact the cartel hoped for because of high global oil inventories. Government officials from major oil producers met in Istanbul this past week to try to lay out more details of production cuts ahead of an official OPEC meeting in November.