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Analysts warn that American motorists could see a repeat of last summer’s high gas prices, as fuel stocks move to multi-year lows ahead of the summer driving season that begins in two months.
US retailer current gas prices average $3.44/gallonaccording to AAA, but they hit a record $5.02/gallon last June.
Domestic gasoline stockpiles have fallen for five straight weeks, culminating in last week’s draw of 6.4 million barrels, the most since September 2021, leaving inventories at 229.6 million, their lowest level. for this time of year since 2015, according to weekly data from the Energy Information Administration.
US gasoline futures gained 3.5% this week to $2.58/gallon, and the prior-month contract has averaged $2.61 so far this month, compared with a March average of five years of $2.01 through 2022.
“We are in danger of going below 200 million barrels of gasoline storage for the first time in many years,” said Robert Yawger, director of energy futures at Mizuho, warned this week.
Declining inventories combined with increased travel could push retail prices up again this summer, with the possibility of last summer’s $5/gallon once again being a possibility, Yawger said.
If refining margins continue their recent rise, “it’s going to put upward pressure on refined product prices, particularly gasoline,” said John Kilduff of Again Capital.
ETFs: (NYSEARCA:UGA), (USE), (UCO), (SCO), (BOD), (XLE)
Negative sentiment on oil prices is likely to dominate financial markets well into spring, writes Pacifica Yield in an analysis recently published in Seeking Alpha.
