U.S. retail gasoline pump prices fell by about 2.5 cents last week to a national average of $2.65 for a gallon of regular. The price of crude oil jumped by nearly 11% last week, although it remains down about 3% over the past four weeks. Last week’s attacks on crude oil tankers in the Gulf of Oman, followed by Friday’s explosion at a Philadelphia refinery, are likely to see prices trending back up.
Futures and options traders also have broken with their weeks-long pattern of selling off their long positions. Rising tensions between the United States and Iran slowed long contract sales to a tiny total of a net 3 million barrels last week. Over the past eight weeks, managed money (hedge funds and other non-oil-market participants) dumped nearly 400 million barrels in long contracts.
Patrick DeHaan, GasBuddy’s head of petroleum analysis, commented, “A large refinery explosion in Philadelphia last week may ultimately serve to push gasoline prices higher once we learn more details about how long that facility may be offline. For now, motorists along the East Coast may only see prices rise a few cents as a result. … Furthermore, oil prices have rebounded notably due to increasing tensions between the U.S. and Iran and attacks in the Strait of Hormuz, a key waterway which sees over 20% of global oil supply traversing through the waterway.”
DeHaan continued, “In addition, trade tensions with China have now taken a back seat, but with President Trump meeting President Xi, we may see either more upward pressure on oil if signs of a truce in trade emerge or downward pressure if the countries move further apart.”
Retail gas prices dipped in a majority of all 50 states last week. The most common price for a gallon of regular gas was $2.39, unchanged from the prior week. Gas at the most expensive 10% of U.S. gas stations averaged $3.64 (down four cents) while prices at the least expensive 10% of gas stations averaged $2.15 (down two cents). The median price at all stations was $2.54, down a penny from the prior week.
At the same time last month, gas prices averaged $2.84, about 19 cents above the current price. A year ago, the national average price was also about $2.84. GasBuddy continuously updates crowd-sourced gas prices at its website.
California drivers were paying $3.84 on average for a gallon for gas Monday morning (down three cents week over week), with drivers in Hawaii ($3.69), Nevada ($3.41), Alaska ($3.33) and Washington ($3.30) rounding out the five states with the highest prices. Drivers in Oregon, Utah and Idaho also were paying more than $3 a gallon.
At the other end of the spectrum, drivers in Mississippi ($2.23), South Carolina ($2.25), Alabama ($2.25), Louisiana ($2.26) and Arkansas ($2.32) paid the least for gas.
West Texas Intermediate crude oil for August delivery traded up about 0.1% Monday morning at $57.43, while Brent for August delivery traded at $64.78, down about 0.6%. The price differential (spread) between front-month WTI and Brent crude is now around $7.35 a barrel, about $1.85 cents narrower than a week ago.
Rising gas prices could bolster interest in America’s most eco-friendly vehicles.