Are gas prices headed still higher this summer?

Gas prices in some areas continue to climb higher, even though many market experts continue to believe that gas prices are nearing a seasonal high due to the completion of seasonal refinery maintenance and abundant crude oil supplies.

Consumers saw the biggest monthly jump in pump prices in six years in May, as the cost of gasoline rose 10 percent compared to April, according to the U.S. Department of Labor’s Consumer Price Index.

• The national average price for regular unleaded gasoline remained relatively steady on the week, sitting at $2.80 per gallon, a price held since last Saturday (June 13).
• Friday’s average price of $2.80 per gallon is a high price for 2015.
• The national average is up a penny on the week and nine cents more than one month ago.
• Gas prices remain 88 cents lower compared to the same time last year.
• Crude oil saw periods of trading above $60 per barrel this week due to Tropical Storm Bill making landfall in Texas.  At the close of Friday’s formal trading on the NYMEX, West Texas Intermediate (WTI) crude oil settled at $59.61 per barrel.

The Energy Information Administration (EIA) noted in its weekly report that crude oil inventories dropped by 2.7 million barrels to 467.9 million barrels, mostly as expected and well off the almost 7-million-barrel draw of the previous week.  Gasoline stocks saw a 500,000 barrel build to 217.8 million barrels.  Gasoline demand was off by 424,000 barrels per day (bpd) compared to the previous week and last week’s 9.176 million bpd level was almost 100,000 bpd lower year on year.

“Gas prices have unexpectedly jumped in many areas over the previous week due to a decline in gasoline stocks caused by high fuel demand and persistent refinery problems, limiting gasoline production,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Despite the rise in pump prices, drivers continue to experience significant year-over-year savings with Friday’s average price at 88 cents per gallon less than the same date last year.”

Tropical Storm Bill made landfall in Texas on Tuesday morning, June 16. The remnants of the tropical storm have brought heavy rain and strong winds.  This could lead to flooding and may impact offshore oil production, however initial estimates suggest that production will not be hampered.  Any storm activity causing disruption in crude oil production and/or refining, especially along the Gulf Coast, would likely result in a temporary spike in crude oil prices and in turn gasoline prices.

 

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 

	6/21/15	Week Ago 6/14/15	Year Ago 6/21/14
National	$2.79	$2.80	$3.68
Virginia	$2.59	$2.58	$3.48
Charlottesville	$2.57	$2.56	$3.38
Norfolk Area	$2.61	$2.60	$3.56
Richmond	$2.54	$2.53	$3.43
Roanoke	$2.54	$2.52	$3.36
Crude Oil	$59.61 per barrel (Friday 6/19/15 close)	$59.96 per barrel (Friday 6/12/15 close)	$106.91 per barrel (6/21/14)