The average U.S. price for a gallon of regular gasoline fell by half a penny last week to start the new week at $2.80, according to the latest data from GasBuddy. Month over month, the price is up nearly 15 cents a gallon, and it is nearly 51 cents a gallon higher year over year. Last month the national average was $2.660, while the year-ago average was $2.298.
Pump prices rose in 35 states last week and fell in 15, much improved over the prior week when prices rose in every state. Crude prices for West Texas Intermediate (WTI) rose above $70 a barrel Monday morning for the first time in over three years. The threat that the president may pull out of the Iran treaty and reimpose sanctions against the Islamic Republic could push oil up by as much as $10 a barrel.
The sanctions would effectively prevent Iran from selling its oil for hard currency (dollars) on the global market. The country would have to revert to a few swap deals (e.g., oil for razor blades) and much of its 3.5 million barrels a day of production would effectively be gone from the market.
U.S. petroleum inventories rose last week, with crude oil stockpiles up by 6.2 million barrels and gasoline inventories up by 1.2 million barrels. Crude oil exports topped 2 million barrels a day for the second straight week.
Patrick DeHaan, head of petroleum analysis at GasBuddy, said:
The rise in gas prices has slowed substantially in the last week in some places, with 15 states seeing gas prices move lower versus last week. … With summer gasoline now phased in and reaching motorists’ gas tanks across the country, it is no longer an active issue pushing prices up. Oil’s moves and possible moves will likely be the key catalyst behind changes at the pump in the weeks ahead as summer driving season soon gets underway. Motorists should expect the national average to drift around in the upper $2 per gallon range for much of the summer.
According to GasBuddy, states where prices moved most last week were: Michigan (down 12 cents); Ohio and Indiana (down six cents); Kentucky (down four cents); South Dakota, Wisconsin and Arizona (up three cents); and Idaho, Illinois and Oregon (up two cents).
States with the lowest average prices last week included: Oklahoma ($2.51); Arkansas and Missouri ($2.52); Mississippi and Louisiana ($2.53); South Carolina ($2.54); Alabama ($2.56); Kansas ($2.57); Texas ($2.58); and Tennessee ($2.59).
The highest average prices per gallon last week were reported from California ($3.62); Hawaii ($3.59); Washington ($3.29); Alaska ($3.25); Nevada ($3.24); Oregon ($3.18); Utah ($3.11); Idaho ($3.07); Pennsylvania ($3.01); and Connecticut ($2.99).
WTI crude oil for June delivery traded up about 1.2% in the early afternoon Monday to $70.54, while Brent for July delivery traded at $76.07. The price differential (spread) between WTI and Brent crude closed by 69 cents to $5.53 a barrel week over week.