To say that retail gasoline prices have been volatile this year may be stating the obvious. Prices climbed from around $2.40 to more than $2.60 a gallon in January before dropping back to around $2.50 in mid-February and then setting a course to wind up Wednesday night at $2.68 for a gallon of regular gas. That’s the highest retail pump price since July 2015, according to GasBuddy.
GasBuddy reported a weekly dip Monday of half a cent to bring the price down to $2.65. and the three cent per gallon jump in just three days is likely due to increased tension in the Middle East and the threat of a trade war between the United States and China.
Patrick DeHaan, head of petroleum analysis at GasBuddy, said:
Many will be quick to ask why this trend is happening. Ultimately, OPEC bears much of the responsibility for cutting oil production in 2017, leaving U.S. oil inventories at far lower levels than a year ago. However, higher oil prices have also enticed U.S. producers to ramp up crude oil exports, effectively draining U.S. oil inventories at a higher pace than that oil is being replaced. In addition, recent rhetoric from the Trump Administration inflaming the situation in Syria and pushing a trade war with China is like pouring gasoline on a fire — they certainly put more upward pressure on prices.
The U.S. Energy Information Administration (EIA) has forecast that the average retail price for a gallon of regular gasoline will reach $2.74 for the April through September summer driving season, a jump of 33 cents a gallon (13.7%) compared with the average for last year’s driving season.
After closing above $67 a barrel on Wednesday, West Texas Intermediate crude oil futures for May delivery had dropped about half a point to around $66.46, although the international benchmark, Brent crude for June delivery, remains above $71 a barrel.