NATIONAL AVERAGE PUSHED HIGHER, BUT WEST COAST, GREAT LAKES COULD SEE RELIEF

For the third straight week, the nation’s average gas price has climbed, rising 13.8 cents from a week ago to $3.92 per gallon today 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 is up 22.5 cents from a month ago and 67.0 cents per gallon higher than a year ago. The national average price of diesel has risen 18.0 cents in the last week and stands at $5.04 per gallon.

“With OPEC+ deciding to cut oil production by two million barrels a day, we’ve seen oil prices surge 20%, which is the primary factor in the national average rising for the third straight week,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Some of the refinery snags that have caused prices to surge in the West and Great Lakes appear to be improving, with prices in those two regions likely to inch down, even with OPEC’s decision, as the drop in wholesale prices has offset the rise due to the production cut. But where gas prices didn’t jump because of refinery issues, they will rise a total of 10-30 cents due to oil’s rise, and some areas are certainly seeing the jump already. For now, I don’t expect much improvement in prices for most of the country, with California and the Great Lakes as the exception, with downdrafts likely in the days and weeks ahead.”

OIL PRICES

After a substantial rally following OPEC+’s decision to cut oil production, oil prices have cooled off slightly, with West Texas Intermediate crude oil falling 48 cents in early Monday trade to $92.16 per barrel, up some $8 per barrel from a week prior, and around $14 per barrel higher than two weeks ago. Brent crude oil was seeing similar moves, down 60 cents in early trade to $97.32 per barrel, but much stronger than last Monday’s $89.55 per barrel level. While the President has indicated there will still be some oil drawdown from the nation’s strategic petroleum reserve, or SPR, current levels are now down over 200 million barrels from a year ago, and could put the nation more at risk should Russia’s war on Ukraine continue for a significant time into the future.

According to Baker Hughes, last week’s U.S. rig count was down by 3 rigs to 762, and was 229 rigs higher than a year ago. The Canadian rig count was up 2 rigs to 215, and was 48 rigs higher than a year ago.

OIL AND REFINED PRODUCTS

According to the Energy Information Administration’s weekly report, crude oil inventories fell 1.4 million barrels last week, being held at levels common for this time of year by continued SPR releases. Meanwhile, the SPR was down 6.2 million barrels to 416.4 million, nearly a third lower than a year ago. Gasoline inventories plunged 4.7 million barrels and now stand nearly 8% below average for this time of year. Gasoline inventories in the Gulf plummeted the most, nearly 4 million barrels. Implied gasoline demand jumped 640,000bpd to 9.47 million, a number likely overstated compared to real demand due to complexities surrounding movements before and after Hurricane Ian. Refinery utilization rose 0.7% to 91.3% with both gasoline and distillate production rising. Total supplies, including the SPR, are down nearly 12% compared to a year ago.

FUEL DEMAND

According to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand fell last week (Sun-Sat) by 0.3%. Broken down by PADD region, demand rose 0.3% in PADD 1, fell 0.5% in PADD 2, fell 2.8% in PADD 3, rose 2.5% in PADD 4 and rose 1.5% in PADD 5.

GAS PRICE TRENDS

The most common U.S. gas price encountered by motorists stood at $3.29 per gallon, unchanged versus last week, followed by $3.49, $3.39, $3.19 and $3.59 rounding out the top five most common prices.

The median U.S. gas price is $3.59 per gallon, up 10 cents from last week and about 33 cents lower than the national average.

The top 10% of stations in the country average $6.12 per gallon, while the bottom 10% average $3.12 per gallon.

The states with the lowest average prices: Georgia ($3.21), Mississippi ($3.25) and Texas ($3.25).

The states with the highest average prices: California ($6.31), Alaska ($5.53) and Oregon ($5.50).