Georgia, Kansas and Oklahoma are still holdouts for crossing the $4 per gallon mark as the national average for a gallon of gasoline is now $4.48
Washington, D.C.—The national average cost for regular gas is steadily climbing, and three states — Georgia, Kansas, and Oklahoma — are still holdouts for crossing the $4 per gallon mark. The national average for a gallon of gasoline is now $4.48. The increase is primarily due to the cost of crude oil, which is hovering near $110 a barrel.
“The high cost of oil, the key ingredient in gasoline, is driving these high pump prices for consumers,” said Andrew Gross, AAA spokesperson. “Even the annual seasonal demand dip for gasoline during the lull between spring break and Memorial Day, which would normally help lower prices, is having no effect this year.”
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 3.6 million bbl to 225 million bbl last week. Gasoline demand also decreased slightly from 8.86 million b/d to 8.7 million b/d. Typically, lower demand would put downward pressure on pump prices. However, crude prices remain volatile, and as they surge, pump prices follow suit. Pump prices will likely face upward pressure as oil prices stay above $105 per barrel.
Meanwhile, the switch to the more expensive summer blend of gasoline, which usually adds seven to ten cents per gallon depending on the market, is happening now. This switchover should be complete nationwide by early June. This summer blend switch is an annual event. It is unrelated to the Biden Administration’s announcement a few weeks ago to allow the higher ethanol E15 gas blend to remain on sale throughout the summer until September.
Today’s national average for a gallon of gas is $4.48, which is 40 cents more than a month ago, and $1.43 more than a year ago.
The nation’s top 10 largest weekly increases: Florida (+29 cents), New York (+24 cents), Illinois (+23 cents), Kentucky (+23 cents), New Hampshire (+22 cents), Connecticut (+21 cents), Massachusetts (+20 cents), Ohio (+19 cents), Maine (+19 cents) and Indiana (+19 cents).
The nation’s top 10 most expensive markets: California ($5.98), Hawaii ($5.31), Nevada ($5.17), Washington ($5.03), Oregon ($4.99), Alaska ($4.88), Washington, D.C. ($4.83), Illinois ($4.82), New York ($4.75) and Arizona ($4.75).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI increased by $4.36 to settle at $110.49/bbl. At the beginning of last week, the price of crude oil decreased due to global market concern that oil demand will suffer as COVID lockdowns in China remain in place. However, crude prices reversed course at the end of the week over growing market worries that Ukrainian and European Union actions against Russian oil and natural gas companies could spark retaliation by Russia, which would lead to more market disruption and uncertainty. Crude prices could fall this week if demand concerns weigh the market down. Additionally, EIA reported that domestic crude supply increased by 8.5 million bbl to 424.2 million bbl. The current level is approximately 12.5 percent lower than during the first week of May 2021.
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