Summer is winding down, but gasoline prices are not. They are rising in 46 states, lifting the national average to $2.35 per gallon Monday, the highest level since June, according to the latest figures from GasBuddy. This as the price of oil nears $50 a barrel.
Patrick DeHaan, senior petroleum analyst for GasBuddy, said the increase in gas prices is being stoked by rising oil prices as inventories continue to tighten and concern over the Venezuelan crisis lingers. Venezuela, riven by political strife, has the largest proven oil reserves in the world. “While we’re likely to see gas prices continuing to move higher in the week ahead as they catch up to oil,” DeHaan said, “we’re unlikely to break out of the well-established rut in the national average which has kept prices between $2.12 and $2.42 for the last 15 months.”
The biggest price gains took place mostly in the South. Georgia, Iowa, New Jersey and South Carolina all had price increases of seven cents a gallon, while Alabama, Arkansas, Louisiana, Nebraska, New Mexico and Virginia all had price hikes of six cents.
The states with the cheapest average gas prices are: Mississippi ($2.09), South Carolina ($2.09), Alabama ($2.09), Missouri ($2.11), Arkansas ($2.11), Oklahoma ($2.12), Tennessee ($2.13), Louisiana ($2.16), Texas ($2.16) and Virginia ($2.17).
Data last week from the Energy Information Administration indicated a drop of 1.5 million barrels in crude oil inventories, a smaller decline than anticipated by analysts. Even so, that drop brought total inventories to their lowest since December 2016. Inventories are continuing to slide from their peak of 536 million barrels in late March to the current level of 481 million.
Oil prices finished last week with a barrel of West Texas Intermediate crude oil at $49.52. Even though the Venezuelan crisis persists, concerns have ebbed in recent days after President Trump hinted that for now sanctions would be only targeted at individuals. Should sanctions be placed on Venezuela’s oil industry, oil markets would likely climb, as Gulf Coast refiners scramble to find oil supply to replace that from Venezuela.
GasBuddy predicts gasoline prices are likely to continue to rise in the near term, with prices in the volatile Great Lakes region likely to climb in a few days, which may contribute as much as a three-cent surge in the national average in the week ahead.