Gas prices increase at kick-off to busy summer driving season

Gasoline demand is on the rise and that is certainly no surprise as more than 39 million people traveled for the extended holiday weekend.

While nationally gas prices are higher than this same day last year, drivers in the Commonwealth of Virginia saw little movement this week as gas prices fell just slightly by a penny.

Today’s national average is $2.38 per gallon. This price is a penny more than one week ago, a penny more than a month ago, and three cents more than a year ago.

At the close of NYMEX trading Friday, WTI crude oil decreased $2.15 on the week to settle at $47.66 marking more than one week of sub-$50 per barrel closing prices. The market remains lukewarm after last month’s meeting with OPEC and non-OPEC producers regarding an extension of production cuts failed to generate more pronounced actions from the cartel. Although the group agreed to extend the cuts through March 2018, market watchers were not surprised by the move and hoped that OPEC would take more drastic measures, like deepening the cuts beyond 1.8 million barrels per day.

“Growing demand pressured prices higher just before the Memorial Day holiday, yet many drivers in the Mid-Atlantic region paid only pennies more per gallon of gasoline during the holiday period,” said Tammy Arnette, Senior Public Affairs Specialist for AAA. “As seasonal demand for gasoline grows, consumers could see summer gasoline prices return to the high prices seen in April, when the national average for a gallon of gasoline was $2.42.”

A wildcard for gas prices in the coming months is the Atlantic Hurricane Season, which runs from June 1 through November 30.  According to the National Oceanic and Atmospheric Administration’s Climate Prediction Center, this year’s season will likely be above normal, which means of the 11-17 named predicted storms, five to nine could become hurricanes.  Should any of these severe storms or hurricanes reach landfall, production, refining and distribution could be impacted. This can lead to price spikes in regional markets along the coast and in areas that rely upon crude oil and refined product from these regions.