Regional gas prices have declined slightly on the week, and it is possible that prices have begun to stabilize as refineries increase production to meet record-high demand.
Today’s average price of $2.06 per gallon in Virginia represents a decrease of two cents per gallon on the week, according to AAA Mid-Atlantic.
Gasoline inventories are up on the East Coast and the return of a few refineries to production in the region are also contributing to the overall expected growth in U.S. refining production. The regional market is well supplied with product and on the whole, gas prices in the region have been steady, moving by +/-2 cents per gallon over the past week.
At the close of Friday’s formal trading session on the NYMEX, WTI was up $1.55 and settled at $46.21 per barrel. Oversupply is likely to continue to characterize the global oil market and attention will remain focused on output from non-OPEC countries and any other factors that may help bring supply and demand into balance.
“Historically gasoline demand increases leading into the summer driving season, and this year so far is no different,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Lower gas prices are contributing to drivers taking to the roads at record levels for this time of year and the 2016 summer driving season is expected to rival 2007 when gasoline demand hit an all-time high.”
Gasoline demand reached its fourth-highest weekly estimate for 2016 and remains well above year-over-year levels. Although the market is well supplied with product, the notable growth in gasoline demand could cause pump prices to become volatile leading into the summer driving season. Refineries nationwide are ramping up production, which should help increase supplies in regional markets. This is good news for the average driver, because if supply can keep pace with demand, averages should remain relatively low and drivers should continue to benefit from comparative savings at the pump.
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Chris Graham
