Despite lower demand for gasoline typical of the winter season, pump prices are edging their way higher in many parts of the country. The national average for a gallon of gas is $3.33, 2 cents more than a week ago. The culprit is the rising price for oil, which is now bouncing around $85 per barrel, nearly $20 more than in November.
“Since dipping to $3.28 in the first week of January, the national average for a gallon of gas has slowly started to rise again, though that hasn’t necessarily been reflective of what we are seeing here in Central Kentucky, at least currently,” said Lori Weaver Hawkins, public and government affairs manager, AAA Blue Grass. “But bigger picture―as long as the price for oil remains elevated, consumers will feel increased pain at the pump.”
(NKyTribune file)
Last week, both OPEC and U.S. energy officials said the COVID-19 omicron variant is no longer expected to slow the continued recovery of petroleum demand in 2022. Despite this, OPEC and its allies are maintaining their planned modest production increases and will not dramatically ramp up output. The result will be a continued tight supply of oil.
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks rose by 5.9 million barrels to 246.6 million barrels last week. Meanwhile, gasoline demand rose slightly from 7.91 million barrels per day to 8.22 million barrels per day. The slight increase still puts gas demand in the average range for the winter driving season. Typically, pump prices drop due to low gas demand and a rise in supply, but a steady increase in the price of crude oil has prevented this from happening. As oil prices continue to climb, pump prices will likely follow suit.
Today’s national average of $3.33 is 5 cents more than a month ago and 94 cents more than a year ago.
Here in Kentucky, the statewide average is $2.97, down a penny from a week ago but up 2 cents from a month ago. Today’s price is 71 cents higher than last year on this date.
The nation’s top 10 largest weekly increases: Kansas (+9 cents), Michigan (+8 cents), Texas (+7 cents), Missouri (+7 cents), North Dakota (+7 cents), South Dakota (+6 cents), Oklahoma (+6 cents), Iowa (+6 cents), Nebraska (+5 cents) and Arkansas (+4 cents).
The nation’s top 10 most expensive markets: California ($4.64), Hawaii ($4.34), Washington ($3.96), Oregon ($3.92), Nevada ($3.80), Alaska ($3.76), Arizona ($3.56), Washington, D.C. ($3.55), Idaho ($3.53) and Pennsylvania ($3.52).
At the close of Friday’s formal trading session, West Texas Intermediate decreased by 41 cents to settle at $85.14. Although crude prices ended the day down due to weather-related demand concerns, prices generally rose last week despite EIA reporting that total domestic crude stocks increased by 500,000 barrels to 413.8 million barrels. The current crude stock level is approximately 15 percent lower than in mid-January 2021, contributing to pressure on domestic crude prices. For this week, crude prices could continue to climb if EIA’s next weekly report shows a decrease in total inventory.
AAA Blue Grass
