AAA reports that the national average for a gallon of regular gasoline increased nearly a dime since last week to $3.46. This price bubble may be alleviated soon as demand and the global cost of oil continue to fall.
“Less expensive oil and fewer people fueling usually combine to lower pump prices,” said Andrew Gross, AAA spokesperson. “There is some upward pricing pressure at the moment due to the switch to summer blend gasoline, which may add about five to ten cents per gallon…(but) if demand and oil costs remain low, this recent price bounce may fade.”
According to new data from the U.S. Energy Information Administration (EIA), gas demand declined from 9.11 million to 8.56 million b/d last week. Meanwhile, total domestic gasoline stocks decreased by 1.1 million bbl to 238.1 million bbl last week. Although gas demand has declined, fluctuating oil prices have increased pump prices amid tighter supply.
The national average of $3.46/gallon is three cents more than a month ago but 79 cents less than a year ago.
Oklahoma remains ranked near the top of the nation’s 10 least expensive markets with an average of $3.08/gallon. Mississippi’s average is $3.00/gallon followed by Missouri ($3.05), Texas ($3.06) and Arkansas ($3.08). Kansas ($3.09), Louisiana ($3.10), Alabama ($3.10), Tennessee ($3.14) and Kentucky ($3.14) round out the top 10 list for least expensive markets.
States seeing the greatest increases in their gasoline averages include Michigan (+25 cents), Arizona (+22 cents), Kentucky (+17 cents), New Mexico (+17 cents), Ohio (+15 cents), South Carolina (+15 cents), Wisconsin (+14 cents), Delaware (+13 cents), Texas (+13 cents) and Indiana (+13 cents).
At the close of Wednesday’s formal trading session, WTI decreased by 92 cents to settle at $76.66. Crude prices decreased yesterday due to weaker domestic oil demand expectations for 2023 after the Chair of the U.S. Federal Reserve indicated that additional interest rate increases are likely. The market is concerned that rising interest rates could tip the U.S. economy into a recession, which would lower oil demand amid reduced economic activity. Additionally, the EIA reported that total domestic commercial crude inventories decreased by 1.7 million bbl to 478.5 million bbl last week.