The national average price for a gallon of regular gasoline Thursday morning is $2.28 a gallon, but that price could rise by more than 10 cents a gallon by the end of the summer, reaching an average of more than $2.42 a gallon, the high so far in 2017.
Gasoline prices dipped to a year-to-date low of $2.23 a gallon in June after beginning their descent in mid-April. The forecast was released Thursday by AAA.
Spokesperson Jeanette Casselano said:
“In spite of industry predictions to the contrary, gas prices this summer are cheaper than at the beginning of the year. However the next few weeks will paint a different picture. Gas prices will move north of $2.32 as early as next week and continue to increase until Labor Day when they’ll start to dip.”
AAA has raised its estimate based on higher levels of volatility in crude oil prices even though the group expects oil prices to remain below $50 a barrel for the immediate future.
Refiners, according to AAA, will continue to run “record levels of crude oil,” creating high levels of gasoline and diesel fuel that would be expected to help tamp down prices. That may not happen, however.
“For the immediate future, expanding U.S. crude oil production and increased gasoline refinery rates are major factors driving gasoline prices this summer. Additionally, an increasing U.S. rig count and growth in production from countries outside of OPEC’s reduction agreement have contributed to a glut of crude that U.S. demand alone just cannot drain. For the immediate future, consumers will see a wild swing in pricing at the pump as summer demand stays strong and crude inventories drop.”
The U.S. Energy Information Administration (EIA) earlier this week revised its summer gas price projection from an average of $2.46 a gallon to a new estimate of $2.38.
EIA agrees with AAA that crude prices will remain around $50 a barrel and also in accord on the potential for crude price volatility for the rest of the summer.
West Texas Intermediate crude oil for August delivery traded up less than 0.2% in the late morning Thursday at $47.18.