Why Are Rising Gas Prices Bucking the Annual Trend?
Drivers across the country don’t like what they are seeing at the pump. Gas prices usually drop this time of year, but this year they’re going up. Gas prices did drop from a high in May, but they’ve been rising since then.
The average U.S. price of regular-grade gasoline has spiked 7¢/gallon over the past two weeks, rising to $2.97.
Industry analyst Trilby Lundberg of the Lundberg Survey says that’s 41¢/gallon higher than at this time last year, while AAA said prices are up 39¢ compared to this time last year, CBS reports.
The highest average price in the contiguous 48 states is $3.82 a gallon in Los Angeles. The lowest average is $2.58 in Houston.
In northwest Iowa, gas prices are around $2.79 a gallon. In Nevada, average gas price went up 4¢ a gallon just last week up.
The average price of diesel also rose 7¢ over the past two weeks, to $3.28.
Despite gasoline demand dropping to 9.0 million b/d and inventories growing to 235.7 million bbl, according to the latest Energy Information Administration (EIA) data, the national gas price average has increased three cents during the week to land at $2.88 — an average pump price not seen on the national level since mid-July, AAA reports.
AAA spokesperson Jeanette Casselano said, "Gas prices are usually cheaper in the fall but this October we're seeing really high gas prices. A lot of factors are playing into that."
“The last quarter of the year has kicked off with gas prices that feel more like summer than fall,” Casselano added. “This time of year, motorists are accustomed to seeing prices drop steadily, but due to continued global supply and demand concerns as well as very expensive summertime crude oil prices, motorists are not seeing relief at the pump.”
Today’s national gas price average is the most expensive for the beginning of October since 2014.
Lundberg said Sunday that rising crude oil prices are the main reason for the increase at the pump.
Crude prices rallied last week due to concerns around the impact of U.S.-imposed sanctions on Iran and economic collapse in Venezuela on the global crude supply this fall. The increase in crude prices occurred despite crude oil inventories increasing to 396 million bbl last week after five consecutive weeks of decline, according to EIA’s report for the week ending on September 21. Domestic crude inventories are now roughly 75 million bbl lower than were they were at this time last year. The new crude data from EIA will likely leave the market searching for additional evidence of supply constraints, including this week’s EIA report, which could push crude prices even higher this fall, according to AAA.
AAA expects gas prices to keep rising in the near future and it’s not clear when those start going down.