Last week was the first time since early June that the national gas price average jumped more than a nickel in under a few days. On the week, it’s a dime more expensive at $2.66 with half of states seeing prices increase by 10 cents or more. However, even with the significant increase, the national average is still cheaper compared to last month (-6 cents) and last year (-19 cents).
Spurred by the Saudi Arabian oil facilities attacks the weekend prior, crude oil (West Texas Intermediate – WTI) increased as much as $10/bbl at its highest point early last week to nearly $64/bbl. Gasoline stations reacted just as swiftly as the market, raising local retail prices by as much as a quarter, which pushed the national average up six cents overnight last Tuesday.
However, by the end of last week, crude was down to $58/bbl and gas prices started to stabilize as reports surfaced that Saudi facilities should be fully operational by end of September.
“At $2.66, the national average is a dime more expensive than last week. The good news is we are seeing downward movement with crude oil prices and stabilization at gas pumps, but Americans can expect some fluctuation through the end of the month,” said Tammy Arnette, Senior Public Affairs Specialist for AAA. “Should Saudi’s crude production be back to full capacity shortly, the price spikes are likely to be temporary.”
In its latest report, the Energy Information Administration (EIA) measured U.S. demand at 8.9 million b/d, which is a substantial 900,000 b/d drop from the previous week and a low reading not seen since February.
The decrease in demand amid the spike in crude oil prices could help to keep gas price fluctuations more moderate through the end of the month.
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Chris Graham
