WASHINGTON, D.C. — A drop in gasoline prices, when much of the country saw a regular gallon dip below $4 per gallon just three weeks ago, has proven to be temporary.
Pump prices rose again during the past week, due primarily to the high cost of crude oil. Fear of a global energy supply disruption due to Russia's invasion of Ukraine outweighs the demand concerns prompted by the impact of COVID-19 on China's economy, reported AAA.
The cost of a barrel of crude continues to hover around $100. With the oil price accounting for about 60 percent of pump prices, the national average for a gallon of regular was $4.19 on May 2, an increase of seven cents per gallon in one week.
"As long as the supply remains tight, it will be hard for crude oil prices to fall and consumers will in turn face higher prices at the pump," said Andrew Gross, AAA spokesperson. "It now costs drivers in the U.S. about $23 more to fill up than a year ago."
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 1.6 million barrels to 230.8 million barrels last week. Gasoline demand decreased slightly from 8.87 million barrels per day to 8.74 million barrels per day.
Although lower gas demand would typically push pump prices lower, the fluctuating oil price and tight gasoline supply have pushed pump prices higher. Pump prices will likely face upward pressure as oil prices remain above $100 per barrel, according to AAA.
The national average of $4.19 per gallon is a penny less than a month ago, but $1.29 more than a year ago.
The nation's top 10 largest weekly increases were found in Delaware (+22 cents), Maryland (+21 cents), Ohio (+19 cents), Pennsylvania (+15 cents), Washington, D.C. (+14 cents), Connecticut (+13 cents), Vermont (+13 cents), Indiana (+12 cents), New Jersey (+12 cents) and North Carolina (+12 cents).
The nation's top 10 least expensive markets are Georgia ($3.72 per gallon), Missouri ($3.77), Kansas ($3.78), Arkansas ($3.79), Mississippi ($3.80), Oklahoma ($3.80), Kentucky ($3.82), South Carolina ($3.85), Alabama ($3.85) and Texas ($3.86).
At the close of April 29's formal trading session, West Texas Intermediate decreased by 67 cents per barrel to settle at $104.69. Although prices declined on the day due to crude demand concerns as lockdowns continue in China, crude prices gained earlier in the week after EIA's weekly report showed that total current supply level is approximately 16 percent lower than at the end of April 2021.
The market will be watching this week's OPEC+ meeting via videoconference on Thursday, May 5, which could see the cartel increase crude production to help meet global demand, AAA noted.
As Convenience Store News reported, the summer driving season is expected to maintain high prices at the pump. During the summer driving season — defined as April through September — the average price for a gallon of gasoline is expected to be $3.84, the highest price seen since 2014 when adjusting for inflation, according to the EIA’s "Summer Fuels Outlook." In 2021, summer fuel prices averaged $3.06 per gallon.