TAMPA, Fla. — The national average price for a gallon of gasoline increased 2 cents last week. Sunday’s average price of $2.36 is 8 cents more than a year ago, according to AAA, whose data is collected from credit card swipes and direct feeds from 120,000 gas stations nationwide, in cooperation with OPIS and Wright Express.
“Gas prices followed AAA’s projections last week, slipping a few cents in some markets, but mostly leveling off,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “After declining for almost a full month, the pump price plunge has fizzled out, primarily due to rising demand and another week of declining crude inventories.”
Sunday’s national average of $2.36 is 4 cents more than the average last year ($2.32), but 38 cents less than the holiday two years ago ($2.74).
“Despite gas prices being slightly higher than last year, AAA expects the most-traveled Memorial Day in more than a decade,” Jenkins said. “Pump prices could face upward pressure by the end of the week, depending on the outcome of an OPEC meeting on Thursday. If prices do surge, it is unlikely they would exceed 10 cents by the holiday. Regardless, most Americans have already locked-in their holiday plans, and any movement at the pump should not be dramatic enough to convince travelers to stay home.”
OPEC Meeting Will Steer Prices
OPEC and 11 other countries will meet in Vienna to discuss extending or changing an agreement for cutting crude output, in attempt to balance the oil market and raise prices. The existing agreement, set back in November, called for a reduction of 1.8 million barrels per day; which sent oil prices 20 percent higher, and gas prices up 20 cents in as many days. The IEA released a report last week stating the world was almost balanced between supply and demand during the first three months of the year. However, the higher oil prices attracted increased production from the U.S., Canada, Libya, and Nigeria – who were not apart of the pact – pushing prices back down. OPEC is said to want oil prices at or above $60 per barrel; the highest daily settlements so far this year were $56.34 (Brent) and $54.45 (WTI) in February.
“Last week, oil prices rose when Russia, Saudi Arabia and Kuwait backed a plan to extend the next round of production cuts to nine months instead of six,” Jenkins continued. “The futures markets will be very reactive to the rhetoric leading up to the meeting this week, and ultimately the final decision on Thursday, which will steer fuel prices this summer.”
(Based on weekly data provided by the EIA)
Crude oil prices finished above $50 a barrel for the first time in four weeks
U.S. crude inventories declined 1.8 million barrels from the previous week
Domestic crude production leveled off slightly, after 3 months of steady growth
Refineries continue to run at a high rate, coming in relatively close to record levels from a few weeks ago. Refining margins are not as strong as years’ past, but appear to be strong enough to entice refiners to keep pumping out product despite disappointing demand numbers so far this year.
Wholesale gasoline futures prices rose 3% last week for a total of 11% in the past two weeks.
Gasoline production dropped nearly 4 percent, but remains above year-ago levels
Gasoline supply grew 1.3 percent, yet remains well below year-ago levels
Gasoline demand inched up for the second consecutive week, but is considered a disappointment compared to, which were 2.6 percent better at this time of year.
Gas Price Survey Methodology
AAA updates fuel price averages daily at http://www.GasPrices.AAA.com. Every day up to 120,000 stations are surveyed based on credit card swipes and direct feeds in cooperation with the Oil Price Information Service (OPIS) and Wright Express for unmatched statistical reliability. All average retail prices in this report are for a gallon of regular, unleaded gasoline.
About The Auto Club Group
The Auto Club Group (ACG) is the second largest AAA club in North America. ACG and its affiliates provide membership, insurance, financial services and travel offerings to over 9 million members across eleven states and two U.S. territories including Florida, Georgia, Iowa, Michigan, Nebraska, North Dakota, Tennessee, Wisconsin, Puerto Rico and the U.S. Virgin Islands; most of Illinois and Minnesota; and a portion of Indiana. ACG belongs to the national AAA federation with more than 57 million members in the United States and Canada and whose mission includes protecting and advancing freedom of mobility and improving traffic safety. Motorists can map a route, identify gas prices, find discounts, book a hotel, and access AAA roadside assistance with the AAA Mobile app for iPhone, iPad and Android. Learn more at AAA.com/mobile. AAA clubs can be visited on the Internet at AAA.com.