The Memorial Day weekend and the start of the summer driving season are still less than two months away but gasoline prices are already on the move.
AAA reports the national average price of regular is $3.50 a gallon, about seven cents a gallon more than a week ago. Compared to a month ago, the average price is about 11 cents a gallon higher.
“Oil prices finally crested and have now settled above the $70 per barrel mark after weeks of hovering just below it,” said Andrew Gross, a AAA spokesperson, “and gas demand is very robust. These two factors will cause drivers to see prices increase for now.”
In fact, oil prices are starting the week well above $75 a barrel after OPEC announced a production cut over the weekend. Motorists are also driving more as the temperatures begin to warm up.
The Energy Information Administration (EIA) reported a sizable increase in gasoline demand in late March and its effect is beginning to be felt across the U.S. As a result, gasoline stockpiles declined last week.
Oil supplies have fallen
Last week Patrick DeHaan, head of petroleum analysis at GasBuddy, reported that crude oil inventories fell by 7.5 million barrels (MMbbl) to a total of 473.7 MMbbl. However, even with the decline, DeHaan points out that oil supplies are more plentiful than last year when fuel prices were much higher.
Drivers in Mississippi are enjoying the nation’s lowest gas prices, paying an average of $3.02 a gallon. Oklahoma and Arkansas both have average gas prices of $3.09.
Most of the pain at the pump is on the West Coast. The average gas price in California is $4.82 a gallon. It’s $4.30 in Washington and $4.29 a gallon in Arizona.