An increase in oil prices, along with refinery slowdowns and higher demand, means U.S. retail prices for gasoline are on the rise, market analysts found.
Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline Tuesday at $2.11, unchanged from the previous day, but 3 percent higher than one week ago. Retail prices at the pump have gone up for 45 out of the past 56 days for a combined climb of 41 cents per gallon.
In a weekly market snapshot, AAA said it expected the upcoming summer driving season may be busy as historically low gasoline prices could encourage more drivers to take to the roads. A federal report from last week said consumer demand for gasoline is already at levels the market would normally experience during the summer.
“This increase in driving may put pressure on local gasoline markets and cause prices to move higher if demand outpaces the available supply of gasoline,” AAA’s report read.
Crude oil prices, meanwhile, are holding steady at around $40 per barrel, after slumping below $30 per barrel earlier this year. Increases in crude oil prices are usually mirrored by higher gasoline prices for consumers.
An April rally in crude oil prices collapsed last week as pessimism over the prospects of a production freeze agreement took hold. Oil-rich nations during the weekend left a production meeting in Doha with no firm commitments on output.
Oil prices are lower because production is high, though pressure may emerge as U.S. output starts to fall. Patrick Dehaan, a senior petroleum analyst for consumer watchdog GasBuddy.com, said the agreement in Doha could, however, potentially work in favor of consumers.
“While typically we’re used to seeing gasoline prices racing higher in the spring, the direct impact of this weekend’s meeting could cause gasoline prices this week to reverse temporarily as oil markets react,” he said in a separate emailed statement.
A short-term market report published last week by the U.S. Energy Information Administration said the full-year 2016 average retail price for gasoline should be $1.94 per gallon. South Carolina has the current lowest state average at $1.89 per gallon.