The national average price for a gallon of regular gasoline rose half a cent in the past week to $2.24, as of Monday morning. This comes after declining for 13 straight weeks.
This rise comes on the heel of oil prices retaking the $50 per barrel level on OPEC and Canadian oil production cuts to start the new year.
Despite signs of oil production cutbacks from OPEC’s kingpin, Saudi Arabia, and the growth in Iraqi output and Russia’s apparent slow take up on cutbacks, some are left wondering about the effectiveness of the pledge to reduce daily oil production by 1.2 million daily barrels. This comes while the United States had attained or even exceeded 12 million barrels per day of output, even though the weekly Baker Hughes rig count was down by four units. Chinese government data too may have helped in the cautious note expressed Friday and into the morning Monday of a drop in growth forecasts from 6.5% in 2018 to 6.0% for the year ahead.
However, the pessimism that hit markets late last week was not enough to keep average gas prices from rising from their lowest since January 2017. Average gas prices have moved higher in 10 states, and while 32 states still have at least one station under $2 per gallon, the number of states with prices averaging under $2 has shrunk from 13 to 10.
States with the lowest average gas prices include Oklahoma ($1.87), Arkansas ($1.88), Louisiana ($1.89), Mississippi ($1.90) and Alabama ($1.91). On the other hand, states with the highest average gas prices include Hawaii ($3.43), California ($3.26), Washington ($2.99), Alaska ($2.91) and Oregon ($2.89).
Patrick DeHaan, head of petroleum analysis for GasBuddy, added:
With oil prices back over $50 per barrel, it looks like gas prices in more areas may soon bottom out and start to tick higher. While it doesn’t seem that prices will rise very far, it looks more and more like the lowest price of the year may now be behind us. The national average briefly hit $2.22 per gallon last week, but will likely move up slightly or stabilize this week. Gas prices in the Great Lakes saw a noticeable jump last week and tend to see among the earliest trend changes in the country, which may be a harbinger of what’s to come for the rest of us.