Gas prices headed up toward Memorial Day?
Today’s national average price of $2.04 per gallon represents an increase of two cents on the week and 20 cents on the month. Pump prices continue to reflect year-over-year discounts, and drivers are saving 36 cents per gallon versus this same date last year.
Summer-blend gasoline has begun to make its way to fuel terminals in many parts of the country, though it can take a few weeks because fuel travels through pipelines at four miles per hour. Continued refinery maintenance and rising demand may also lead to higher prices in some areas.
WTI closed out Friday’s formal trading session on the NYMEX up $2.93 and settled at $39.72 per barrel. The EIA (U.S. Energy Information Administration) reported that the U.S. crude oil inventory fell for the first time in the last eight weeks by 4.9 million barrels for the week ending April 1, 2016, compared to the previous week. U.S. crude oil production fell for the tenth consecutive week for the week ending April 1, 2016 and is at the lowest level since November 14, 2014.
“Prices are expected to move higher leading into the summer driving season, but motorists will likely continue to benefit from comparative savings due to the abundance of supply and lower crude oil prices,” said Martha Meade, Manager, AAA Mid-Atlantic. “Summer blend gasoline costs more to produce so drivers will notice higher prices over the next few weeks.”
A planned meeting of major oil producers next Sunday has many analysts skeptical that an agreement to freeze production will be reached. Iran has ruled out restricting output until its production recovers to pre-sanction levels. Currently, output remains at or near record highs, and a freeze would do little to reduce an extension in production with at least 1 million barrels of crude pumped every day in excess of demand.