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Gas Prices Stabilize as Oil Remains Indecisive, OPEC Increases Production for May

 
by: Gas Buddy
Posted: April 5, 2021

 

 

BOSTON...For the third consecutive week, the national average price of gasoline has dropped, declining 0.4 cents to $2.86 per gallon today according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average now stands 9.9 cents higher than a month ago and nearly 96 cents higher than a year ago. The national average price of diesel has fallen 0.2 cents in the last week and stands at $3.08 per gallon.

“Last week was a mixed bag for consumers at the pump as gas prices in half of states rose, while the other half saw declines, with March closing like a lamb after starting out like a lion,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “Oil prices have shown signs of strength in the last few trading sessions, as OPEC agreed to raise oil production starting in May by a very modest 350,000 barrels per day. Overall, it’s a small increase in output as global demand continues to show strength in light of Covid-related improvements. U.S. gasoline demand rose for the sixth straight week as consumers hit the road for Easter, and with demand growth likely to remain robust, we may see a second attempt at a run at a national average of $3 per gallon in the months ahead. While the last few weeks have seen gas prices hold mostly steady, it’s not likely to last forever, especially as Americans increasingly get outside as warmer temperatures return.”

OIL PRICES
The price of oil continued to see-saw over the last week, with little overall change. As of early Monday morning, a barrel of West Texas Intermediate crude oil stood down 91 cents to $60.54 per barrel, slightly off from last Monday’s $61.11 level. Brent crude oil was down $1.00 to $63.86 per barrel, following WTI’s lead, at $63.85, slightly below its week ago level fof $64.55. OPEC last week met and announced a slight 350,000 barrel increase in oil production effective for May, which pushed oil prices higher late in the week on the smaller than expected increase as global demand rebounds as the Covid pandemic improves.

The oil rig count continues to improve in the U.S. with 13 rigs being added for a total of 430 active rigs, still down 234 from a year ago. Canada saw a drop of 12 rigs to 69 total rigs, an improvement of 28 from the year ago level. As oil prices remain in healthy territory, U.S. oil producers seem to be more comfortable returning some oil production to the system after a dismal 2020.

OIL INVENTORIES
Data from the Energy Information Administration last week printed a 900,000 barrel decline in U.S. oil inventories, which now stand about 6% above the average range for this time of year. Gasoline inventories fell a healthy 1.7 million barrels and stand 4% lower than the five year average for this time of year, while distillate inventories perked up by 2.5 million barrels and stand about 4% above the five year average. Implied gasoline demand, a proxy of consumption, rose to nearly 8.9 million barrels per day, the highest pandemic figure as Americans return to the road. Refinery utilization also continued to move higher, rising 2.3 percentage points to 83.9% last week, with gasoline production rising to 9.3 million barrels per day.

FUEL DEMAND
According to a new dataset being released by GasBuddy, U.S. gasoline demand continued to rise for the week ending March 27, as Americans continued to get outside amidst better conditions and fewer travel restrictions. National gasoline demand rose 2.45%, while demand rose 3.0% in PADD 1, rose 0.9% in PADD 2, rose 3.3% in PADD 3, rose 4.5% in PADD 4 and rose 3.5% in PADD 5. Weekly gasoline demand has now risen for six straight weeks to a fresh pandemic high, also the highest since mid-to-late 2019. U.S. gasoline demand now stands 13.6% higher than a month ago.

GAS PRICE TRENDS

The most common U.S. gas price encountered by motorists was $2.69 per gallon, unchanged from last week, followed by $2.79, $2.89 and $2.59.

The average cost at the priciest 10% of stations stands at $3.73 per gallon, up 1 cent from a week ago, while the lowest 10% average $2.44 per gallon, up 1 cent from a week ago.

The median U.S. price is $2.76 per gallon, up 1 cent from last week and about 8 cents lower than the national average.

The states with the lowest average prices: Texas ($2.57), Mississippi ($2.57) and South Carolina ($2.57).

The states with the highest priced states: California ($3.89), Hawaii ($3.62) and Nevada ($3.33).

For a complete listing of all 50 state averages, please visit https://www.gasbuddy.com/usa. For cities and state data, visit http://fuelinsights.gasbuddy.com.

 

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