Falling inventories, stable rig counts and now a potential crisis in Venezuela all combined last week to push up gasoline prices across much of the United States. As of Monday morning, the national average price of a gallon of regular gasoline rose by four cents to $2.31 week over week.
Crude oil prices briefly touched $50 a barrel very early Monday morning, but they have since fallen back to around $49.40 for West Texas Intermediate crude oil to be delivered in September.
The price of crude oil rose by nearly 9% despite reports that OPEC was having difficulty keeping its members in line with the planned production cuts. GasBuddy senior petroleum analyst Patrick DeHaan commented:
The upward climb at pumps across the country has largely continued as crude oil prices rallied and stand within striking distance of $50 per barrel. The rise in oil has come due to unrest and concern over the political outlook in Venezuela, a major supplier of crude oil to the U.S., due as well to Saudi Arabia’s export cut to six million barrels per day. Add on top of it U.S. oil inventories that have declined over 50 million barrels from March and you have a recipe for a continued rally in gasoline prices in much of the country. Watch for some volatility in oil and gasoline prices in the weeks ahead, especially with what’s going on in Venezuela. August will likely feature the summer’s highest gasoline prices.
Among the states, gasoline is cheapest in South Carolina ($2.02 a gallon), Alabama ($2.03), Mississippi ($2.03), Oklahoma ($2.06) and Missouri ($2.06).
The five states where residents are paying the most for gasoline on Tuesday are Hawaii ($2.992), California ($2.931), Washington ($2.805), Alaska ($2.721) and Oregon ($2.650).
States where pump prices rose the most last week included Ohio (11 cents), Michigan (10 cents), Indiana (nine cents), Florida (eight cents), Illinois (eight cents), Kentucky (eight cents), Maine (five cents), West Virginia (five cents), New Hampshire (four cents) and Massachusetts (four cents)
Last week’s decision by Saudi Arabia to cut oil exports was a factor in the weekly rise, as was the ongoing political turmoil in Venezuela, which will be closely watched moving forward as the Trump administration threatens sanctions against Venezuela if Venezuelan President Maduro wins elections to expand his power to rewrite the constitution and install more of his supporters into power.