In the last 23 consecutive days, average gas prices have moved higher and up 27 cents per gallon because of higher crude oil costs and a number of refinery issues. Recently the average, which is obtained, is $2.66 per gallon. This shows it is the most expensive average gas price in the current year.
Consumers are paying six cents more per gallon than what were they paying a week ago and 27 cents more than one month ago. The national average of the gasoline price is continuously increasing, but somewhat crude prices continue to provide consumers with noteworthy, annual savings, which is described from recent gas price average, was $1.01 per gallon less than last year.
Moreover, prices at the pump repeatedly increase in the spring due to annual maintenance, increases in demand and the higher costs associated with producing more expensive summer blend gasoline. Further unexpected refinery issues are also keeping upward pressure on gas prices and motorists may see prices going up a bit higher in the next few weeks.
Recently, the price of oil continues to rally because of a slowdown in U.S. production, a deteriorating dollar and instability in the Middle East. U.S. oil supplies are at high levels, but the growth in production has reportedly been slowed in recent weeks, which hinted at a new balance in supply and demand. Crude oil prices are trading at a five-month high of around $60 per barrel mark, and it is difficult to predict that oil prices will remain at this level.
Furthermore, U.S. oil drilling rigs have reached their lowest level since October 2010 while the U.S. oil storage remains at an all-time high level. Domestic oil production companies are eyeing on the price, and they could resume production in order to get some benefit from the surge of oil prices.
The Energy Information Administration (EIA) reported in its weekly report that crude oil inventories show a decline by 3.9 million barrels to a level of 487 million barrels. In addition, the decline in prices follows only one other week in 2015 and puts inventories 87.6 million barrels higher than the same period last year.
Gasoline stocks in the recent data rose by 400,000 barrels to a level at 227.9 million, but gasoline demand showed a decline by 135,000 barrels per day to a level of 8.785 million bpd. The average for four weeks for gasoline demands is 8.951 million bpd that represents a rise of 3.9% when compared to the same period last year.
The rising pump prices are directly related to the price of crude oil, which is up $15 above the mid-march price of crude oil. However, despite this rising trend in crude oil prices, consumers would continue to see pump prices considerably lower than last year, which does not include any major supply disruptions.
Although the most expensive oil of 2015 caused the increase at the pump, oil prices will continue to surge this week. However, it is the norm for pump prices to inch higher leading up to the summer driving season and the transition to more expensive summer blend fuel. A record high domestic oil production is likely to deliver the cheapest summer gas prices in a decade.
Although a primary factor that drives prices this week was higher, crude oil prices, which are happening because of increased geopolitical tensions in the Middle East, are resulting in an increase and thus lowering the U.S. dollar parity as well as the issuance of OPEC monthly market report. In addition, oil prices moved after OPEC’s monthly market report, which shows expectations of a slight increase in demand for the oil it produces.
As Memorial Day approaches, the current summer should see gas prices at a five-year low. The belief is that gas prices will not go as high in 2015.
