Oct. 09–Increased crude oil prices are behind the resurgence in gas prices seen in the past week that puts them up with 2014 prices.
The national average sits at $.2.91 for a gallon of regular unleaded. It’s 3 cents more than the average last week, 6 cents more than a month ago and 41 cents more than a year ago. Diesel prices have risen about 6 cents a gallon in the past week to average $3.27 a gallon.
The state averages for gasoline in Arkansas and Oklahoma are $2.66 and $2.72, respectively. The cheapest gas in Arkansas on Monday, according to the AAA Fuel Gauge Report, was for about $2.60 a gallon in Garland, Miller, Drew, Craighead and Greene counties.
Gas was going for about $2.65 a gallon in Sebastian County and $2.69 in Crawford County on Monday.
All but seven states are paying more on the week.
“The September switch-over to winter-blend gasoline ushered in cheaper gas prices compared to the summer, but that drop was short lived,” said Jeanette Casselano, AAA spokesperson. “Crude oil accounts for half of the retail pump price and crude is selling at some of the highest price points in four years. That means fall and year-end prices are going to be unseasonably expensive.”
Patrick DeHaan, head of petroleum analysis for GasBuddy, said in his weekly report the national average gas price has “broken out of a well-established rut, climbing above $2.90 per gallon for the first time since mid-June.” This is due to rising oil prices ahead of the reinstatement of sanctions against Iran and OPEC not pumping enough oil to meet robust demand.
“We may see prices continue to lift ahead of the mid-terms, however completely unrelated to the elections, but due to constant threats from an improving economy: higher demand and lower supply is tipping the balance of the oil market and pushing prices higher, DeHaan added. “We may even soon see $3 per gallon nationally, which would be the first time since October 2014, if oil prices continue to rise. I, along with motorists, will be eagerly awaiting any relief at the pump, but don’t hold your breath — it may get worse before it gets better.”
The U.S. economy continues its streak of robust growth, AAA notes, adding a level of urgency for more oil production as unemployment rates fell to their lowest since 1969 last week. Crude oil has priced higher amid concerns of global crude supply and geopolitical tensions, including pending sanctions with Iran and Venezuela’s unstable economy, AAA states.
As a result, fall gas prices have not been this expensive since 2014. At that time, motorists were paying on average more than $3 a gallon and crude oil was selling well above $70 a barrel. This year, despite stocks increasing in the U.S. by 8 million barrels on the week, crude oil is selling at a good $25 a barrel or more than last year, hitting $75 per barrel last week.
“As speculation ramps up before the new sanctions on Iran take effect — which is driving increased investment in crude under the allure of even higher prices being reached later this year — crude prices will likely continue climbing next week,” the AAA Fuel Gauge Report concludes.
In related news, Baker Hughes Inc. reported that the U.S. lost two oil rigs last week, bringing the total to 861. However, when compared to last year at this time, there are 113 more rigs now than in 2017.
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