Prices at U.S. gas stations have ticked upwards after two weeks of declines, with the escalating situation in the Red Sea creating significant volatility, according to GasBuddy on Monday. National average prices rose 0.6 cents from a week ago, hitting $3.04 on Sunday, but still down 1.4 cents from a month ago and down 23.9 cents from a year ago.
The national average price for diesel in the U.S. has seen a 2-cent drop in the last week, now at $3.89 per gallon, which represents a drop of 69 cents from a year ago. “Last week was a bit of a mixed bag for gasoline prices, with prices increasing early on but falling again in recent days as the situation in the Red Sea continues to drive market volatility,” said Patrick De Haan, head of petroleum analysis at GasBuddy. De Haan noted that as a result of the recent attacks on shipping in the Red Sea by Yemen’s Iran-backed Houthis and the U.S. response, oil prices jumped last week but have been counterbalanced by economic concerns and weak demand fears.
“Gasoline inventories also saw another large rise, putting some downward pressure on gas prices, and leaving an opportunity for the national average to potentially briefly fall below $3 per gallon. We’ll have to see if the stars finally align for such a move,” De Haan said. At 2:05 p.m. EST on Monday, Brent crude oil was trading at $78.12, down 0.22% on the day, while West Texas Intermediate (WTI) was trading at $72.41, down 0.37% on the day. Last week, the Energy Information Administration (EIA) reported a build of 1.3 million barrels in U.S. oil inventories, with an additional 600,000 also added to the Strategic Petroleum Reserve (SPR). U.S. crude oil production remained unchanged from the previous week at 13.2 million barrels per day.
Gasoline inventories saw a major build, adding 8 million barrels to reach 18 million barrels more than this same time period a year ago, with implied gasoline demand rising to 8.33 million bpd–a figure that Gasbuddy reports as still “seasonally weak”. GasBuddy also notes that refinery utilization dropped 0.6% to 92.9%, “a number that will likely continue to come under pressure as refinery maintenance season eventually starts and weak demand leads to refinery run cuts”.
Source: https://oilprice.com