Thanks to increased demand and production cuts by OPEC+ members, prices are expected to take an expected but undesired direction.
Gasoline prices rose for the second week in a row as crude oil prices faced upward pressure from supply outages and rising demand.
Crude prices, the key component of gasoline, have risen for three straight weeks, though they fell a bit on April 10.
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The average price of a gallon of gasoline rose 8.8 cents from a week ago, according to GasBuddy data collected from more than 150,000 gas stations. Nationwide, gasoline averaged $3.57 per gallon on April 9.
Gasoline prices are still cheaper than a year ago when motorists paid 52.6 cents more per gallon.
“The national average price of gasoline has continued its relatively slow climb, with 44 states seeing average gasoline prices rise over the past week,” said Patrick De Haan, head of oil analysis at GasBuddy, an information provider. on Boston-based retail fuel prices. and data
OPEC’s decision to reduce supply also played a role.
“Prices are rising not only due to continued increases in demand as temperatures rise, but also due to pressure from oil prices, which have risen more than 20% in the last month, mainly driven by OPEC’s surprise decision a week ago to cut oil production,” he said.
The national average diesel price has fallen 1.6 cents over the past week and consumers are paying $4.15 per gallon, 88.9 cents less than a year ago.
Currently, refineries are switching to summer gasoline blends and performing scheduled annual refinery maintenance, both of which are factors causing prices to rise, De Haan said.
“The uptrend is expected to continue through much of the rest of the spring, but once the transition to summer gasoline and refinery maintenance are behind us, the April and May jumps could lead to declines in June.” , said. “However, for diesel, the news continues to be good, with the national average price of diesel continuing to fall, now by its smallest difference to gasoline in more than 13 months.”
Consumer expectations for higher gasoline prices have begun to wane. Expected average price changes for the coming year fell 0.1 percentage point for gas (to 4.6%), according to the March 2023 report. Consumer Expectations Survey which was published on April 10 by the Federal Reserve Bank of New York Microeconomics Data Center.
The New York Fed report showed that consumers expect more price increases due to inflation in both the short and medium term, but they fell slightly over the longer term horizon.
Consumer expectations for price increases in food, gas, rent and health care expenses continued to decline for the coming year, while they expect the cost of a college education to rise.
Home prices are also expected to rise but are below pre-pandemic levels.
Oil prices rise to $80
OPEC+’s decision to cut production by 1.15 million barrels per day pushed crude prices up 20%.
Crude oil rose from a low of $65 a barrel to trade above $80 last week.
The rebound in global oil demand has been slower than expected, especially in China.
“China’s economic gains have been slower than anticipated, which also helped dampen recent sentiment of a stronger rebound in global oil demand,” De Haan said. “However, with temperatures starting to warm up in the US, demand picking up, and refiners ending seasonal maintenance, demand for oil is likely to start to accelerate, and further gains are possible in the coming weeks”.
