GAS PRICES SURGE AS HEAT HITS REFINERY OUTPUT

The nation’s average price of gasoline has soared 16.5 cents in the last week to $3.72 per gallon, according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average price of diesel has jumped 15.5 cents in the last week and stands at $3.99 per gallon.

“Gas prices suddenly soared over the last week due to heat-related refinery outages that impacted some of the largest refineries in the country, at a time when summer gasoline demand peaks and as gasoline inventories slid to their lowest July level since 2015,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “In addition, oil prices surged to their highest level in months, rising to over $80 per barrel due to SPR releases coming to an end and concerns over cuts in supply from Saudi Arabia and Russia, the second and third largest oil producers in the world. Motorists have seen average gasoline and diesel prices rise at the fastest pace in over a year, but the rise seen in the last week should now start slowing. However, as we get ever closer to the peak of hurricane season, any new issues could easily push the national average over $4 per gallon for the first time in 2023. Drivers may want to brace for potentially higher prices yet.”

OIL PRICES

Oil markets are fresh off the heels of five straight weekly gains, with oil prices up nearly 5% from a week ago on concerns over tight supply from OPEC+, but mainly Saudi Arabia and Russia. In early Monday trade, a barrel of West Texas Intermediate crude oil was up another 87 cents to $81.45 per barrel, up from last Monday’s $77.99 per barrel start. Brent crude oil was also seeing solid gains in early trade, up 64 cents to $85.63 per barrel, up from $81.87 a week ago. Markets lurched higher again on Friday as word that Saudi Arabia plans to push the production cuts into September, after initially failing to get much response to its cuts that began in July. With additional economic data looking healthy, the U.S. may be able to avoid a broad recession, adding to the sentiment that oil demand will be stronger as a result, putting the production cut by Saudi Arabia and Russia front and center to the recent rally in oil.

OIL AND REFINED PRODUCTS

Last week’s report from the Energy Information Administration showed a 600,000 barrel decline in oil inventories, which stand about 34.7 million barrels above last year. The SPR was unchanged, as releases have largely wrapped up, while refilling the SPR should commence in September with at least six million barrels. Gasoline inventories fell again, by 800,000 barrels, to the lowest July level since 2015. Gasoline inventories are now 3.3% lower than a year ago and 7% below the five-year average for this time of year. Distillate inventories fell 200,000 barrels but remain 6.2 million barrels higher than last year while holding at 14% below the five-year average for this time of year. Implied gasoline demand, a proxy for retail sales, rose 84,000 bpd to 8.94 million barrels, while refinery utilization fell nearly a percentage point to 93.6%.

FUEL DEMAND

According to GasBuddy demand data driven by its Pay with GasBuddy™ fuel card, U.S. retail gasoline demand saw a 0.9% fall last week (Sun-Sat), potentially having peaked for the summer as August brings the return to school for millions. Broken down by PADD region, demand rose 0.1% in PADD 1, fell 1.7% in PADD 2, fell 0.9% in PADD 3, fell 1.4% in PADD 4, and fell 2.5% in PADD 5.

GAS PRICE TRENDS

The most common U.S. gas price encountered by motorists stood at $3.49 per gallon, up 20 cents from last week, followed by $3.59, $3.69, $3.39, and $3.89 rounding out the top five most common prices.
The median U.S. gas price is $3.59 per gallon, up 20 cents from last week and about 13 cents lower than the national average.
The top 10% of stations in the country average $4.82 per gallon, while the bottom 10% average $3.25 per gallon.
The states with the lowest average prices: Mississippi ($3.24), Louisiana ($3.33), and Alabama ($3.34).
The states with the highest average prices: California ($4.95), Washington ($4.90), and Hawaii ($4.70).

DIESEL PRICE TRENDS

The most common U.S. diesel price stood at $3.99 per gallon, up 30 cents from last week, followed by $3.79, $3.89, $3.69, and $4.19 rounding out the top five most common prices.
The median U.S. diesel price is $3.89 per gallon, up 20 cents from last week and about 10 cents lower than the national average for diesel.
Diesel prices at the top 10% of stations in the country average $4.97 per gallon, while the bottom 10% average $3.45 per gallon.
The states with the lowest average diesel prices: Texas ($3.60), Mississippi ($3.63), and Louisiana ($3.63).
The states with the highest average diesel prices: Hawaii ($5.67), California ($5.22), and Washington ($4.92).