Gas Prices Are Approaching 12-Month High

U.S. retail gasoline pump prices returned to their old groove of rising last week, following the first week in nearly two months when prices were flat. Last week, prices rose by three cents a gallon nationally to average $2.89. In the beginning of the month they rose to a record high.

Late last week, crude oil prices started to dip slightly as U.S. commercial inventory jumped by 5 million barrels. Even a decline in new drilling (down 21 rigs last week) didn’t push prices higher Monday morning. The U.S. president has said he’s talked to the Saudis about increasing production as U.S. waivers to customers of Iran expire this week. So far the Saudis have not responded, but a Russian spokesman said that all the members of the so-called OPEC+ coalition plan to hold to their reduced production quotas.

Patrick DeHaan, GasBuddy’s head of petroleum analysis, commented, “Peak prices are likely starting to enter into view for over the next few weeks for some states — mainly on the West Coast — while the national average will likely peak somewhere between 2−5 weeks from now before falling.”

As the Memorial Day holiday approaches, pump prices will continue to rise as the “official” start of the summer driving season begins. DeHaan continued, “The homestretch is quickly coming into view. Perhaps the best news for motorists is they may catch a break in June as prices moderate slightly as refiners finish maintenance and boost production.”

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Retail gas prices rose in 48 states last week, as in the Northeast, Rhode Island, Delaware, Massachusetts, Connecticut and New Jersey all made GasBuddy’s list of the 10 states seeing the largest weekly increases. Prices rose most in Utah, up 13.5 cents, and Nevada, up 12.7%, week over week. Prices dropped a fraction of a penny in Missouri and Tennessee.

At the same time last month, gas prices averaged $2.70, about 19 cents below the current price. A year ago, the national average price was about $2.82, about seven cents lower than the most recent price. Some states already have $3 gas.

California drivers were paying $4.09 a gallon for gas Monday morning, with drivers in Hawaii ($3.80), Nevada ($3.51), Washington ($3.49) and Alaska ($3.37) rounding out the five states with the highest prices. Drivers in Oregon, Arizona, Pennsylvania, Utah and Connecticut were also paying more than $3 a gallon.

At the other end of the spectrum, drivers in Alabama ($2.51), Mississippi ($2.52), Louisiana ($2.55), Arkansas ($2.56) and South Carolina ($2.56) were paying the least for gas.

West Texas Intermediate crude oil for May delivery traded down about 0.5% Monday morning at $62.99, while Brent for June delivery traded at $71.54, down about 0.11%. The price differential (spread) between front-month WTI and Brent crude is now around $8.55 a barrel, 20 cents wider than a week ago.
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