According to AAA, At $2.86, gas prices are at their highest point for an Independence Day holiday in four years. However, for the nearly 40 million motorists expected to travel this week, they will find prices at the pump 11-cents cheaper than this past Memorial Day holiday.
“The national gas price average has held fairly steady for the past 10 days, suggesting that U.S. demand is keeping pace with supply and stabilizing summer gas prices,” said Jeanette Casselano, AAA spokesperson. “However, elevated crude oil prices and other geopolitical concerns could tilt gas prices more expensive in the early fall despite an expected increase in global crude production from OPEC and its partners.”
AAA is tracking the following factors that will continue to impact pump prices through the fall:
- Domestic crude inventories: For the first summer driving season in five years, the U.S. has seen the largest one-week reduction (9.9 million bbl) in crude inventories. A consistent decline in supplies could spark higher gas prices.
- Crude production and exports: Refinery runs are at an all-time high and exports are at record levels, which impacts supply levels.
- Gasoline demand: The latest Energy Information Administration (EIA) data shows U.S. demand at 9.7 million b/d, one of the highest levels of the year, and could hit a new record with Independence Day holiday travel.
- Crude oil prices: Last week, crude oil hit $74/bbl – its highest level since 2014.
- Geopolitical concerns: Market observers are watching crude production levels in Libya and Venezuela amid economic woes in Venezuela, and details on the Iran sanctions all of which are influencing market prices.
“If U.S. demand remains strong, domestic and global supply decline and crude inventories continues to sell over $70/bbl, motorists may see the national gas prices average to potentially jump back up to nearly $3/gallon in coming months,” added Casselano.
Motorists in the West Coast region are seeing the most expensive pump prices in the country: Hawaii ($3.73), California ($3.66), Washington ($3.43), Alaska ($3.41), Oregon (3.31), Nevada ($3.26) and Arizona ($3.02). However, the majority of prices in the region have declined since last week, with Nevada and Arizona seeing the largest decrease at three cents each. Only Oregon saw a slight one penny increase.
According to the EIA’s petroleum report for the week ending on June 22, gasoline stocks in the region fell by 300,000 bbl and now sit at 30.7 million bbl. However, inventories are 1.7 million bbl higher than they were at this point last summer, which will likely help prices stabilize if there are any major supply disruptions in the region this week
For more information, visit AAA