As the unofficial start to the summer driving season has begun, the nation’s average price of gasoline has risen 2.7 cents from a week ago to $3.55 per gallon, according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average price of diesel has fallen 4.9 cents in the last week and stands at $3.91 per gallon.
“Gasoline prices have drifted higher in the last week due to some relatively minor refinery kinks and low gasoline supply, but it may not be a trend that lasts too much longer,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “As we unofficially start the summer driving season, the national average is likely to spend much of the summer in the range of $3.35-$3.85 per gallon, though it could go higher if unexpected refinery outages flare up, or we see a major hurricane or economic development. While gasoline prices have inched up slightly, we’re still faring much better than we did last year, when the national average started to soar after Memorial Day on its way up to the $5 per gallon mark. In addition, gas prices may temporarily rally if a debt ceiling deal passes through Congress in the weeks ahead, based on the optimism that such a deal could avert a major recession, keeping oil demand stronger this summer.”
OIL PRICES
With a deal to increase the Fed’s debt ceiling agreed on, much still needs to happen before it is passed. Some House members have promised to make passage more challenging, with both sides digging into what might prove to be a difficult feat. Oil markets are cautiously optimistic, but ultimately, any rally in oil may wait until after a bill is passed to raise the debt limit. In addition, OPEC’s upcoming June meeting may bring with it some saber-rattling, but markets are largely not expecting OPEC+ to further cut production after Russian Deputy Prime Minister Alexander Novak threw cold water on the notion of additional cuts. Oil inventories remain on the tight side, but with global demand down, and a Covid bounce in China all but off the table, there are limited catalysts for oil markets. In early trade, a barrel of WTI was last down 75 cents to $71.92 per barrel, roughly 50 cents above last week’s $71.45 per barrel start. Brent crude was also trading in the red, down $1.09 to $75.98 per barrel, also a roughly 50-cent rise from last week’s $75.50 start.
OIL AND REFINED PRODUCTS
Last week’s report from the Energy Information Administration showed a significant 12.5-million-barrel decline in crude oil inventories, which are now 3% below the five-year average for this time of year. The SPR fell by 1.6 million barrels as the 2015-mandated sales continue, while domestic oil production inched back up to 12.3 million barrels per day. Gasoline inventories fell by 2.1 million barrels and stand 8% below the five-year average for this time of year, while distillate inventories fell by 600,000 barrels and are 18% below the five-year average range for this time of year. Implied gasoline demand, a proxy for retail demand, surged 529,000 barrels per day, but rather than actual demand rising, this signals stations filling their large underground tanks ahead of a major holiday weekend. Refinery utilization fell 0.3 percentage points to 91.7% as gasoline production rose to 10.3 million barrels per day.
FUEL DEMAND
According to GasBuddy demand data driven by its Pay with GasBuddy™ fuel card, U.S. retail gasoline demand saw a fall of 1.3% last week (Sun-Sat). Broken down by PADD region, demand fell 1.6% in PADD 1, fell 1.2% in PADD 2, fell 2.5% in PADD 3, fell 2.0% in PADD 4, and rose 0.4% in PADD 5.
GAS PRICE TRENDS
The most common U.S. gas price encountered by motorists stood at $3.39 per gallon, unchanged from last week, followed by $3.49, $3.59, $3.29, and $3.19 rounding out the top five most common prices.
The median U.S. gas price is $3.41 per gallon, up 2 cents from last week and about 14 cents lower than the national average.
The top 10% of stations in the country average $4.73 per gallon, while the bottom 10% average $2.97 per gallon.
The states with the lowest average prices: Mississippi ($2.96), Louisiana ($3.09), and Texas ($3.09).
The states with the highest average prices: California ($4.77), Hawaii ($4.75), and Washington ($4.61).
DIESEL PRICE TRENDS
The most common U.S. diesel price stood at $3.99 per gallon, unchanged from last week, followed by $3.79, $3.89, $3.69, and $3.59 rounding out the top five most common prices.
The median U.S. diesel price is $3.79 per gallon, down 6 cents from last week and about 12 cents lower than the national average for diesel.
Diesel prices at the top 10% of stations in the country average $4.98 per gallon, while the bottom 10% average $3.17 per gallon.
The states with the lowest average diesel prices: Texas ($3.31), Louisiana ($3.47), and Oklahoma ($3.53).
The states with the highest average diesel prices: Hawaii ($5.80), California ($5.02), and Washington ($4.90).