The oil market was roiled after Russia’s violent invasion of Ukraine, with crude spiking briefly to over $100/bbl before settling back into the mid-$90s, according to AAA. The increase in the global price of oil has led to higher pump prices in the U.S. The national average for a gallon of gas has risen to $3.61, eight cents more than a week ago.
“Russia’s invasion and the responding escalating series of financial sanctions by the U.S. and its allies have given the global oil market the jitters,” said Andrew Gross, AAA spokesperson. “Like the U.S. stock market, the oil market responds poorly to volatility. It’s an explosive situation, and a grim reminder that events on the far side of the globe can have a ripple effect for American consumers.”
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 600,000 bbl to 246.5 million bbl last week. Meanwhile, gasoline demand rose slightly from 8.57 million b/d to 8.66 million b/d. The increase in gas demand and a reduction in total supply contribute to rising pump prices. But increasing oil prices play the lead role in pushing gas prices higher. Pump prices will likely continue to rise as crude prices continue to climb.
Today’s national average for a gallon of gas is $3.61, which is 26 cents more than a month ago and 90 cents more than a year ago.
The nation’s top 10 largest weekly increases: Michigan (+18 cents), South Carolina (+16 cents), Kansas (+15 cents), Missouri (+15 cents), Indiana (+14 cents), Illinois (+14 cents), Tennessee (+14 cents), Georgia (+13 cents), North Carolina (+12 cents) and Arizona (+10 cents).
The nation’s top 10 most expensive markets: California ($4.82), Hawaii ($4.54), Oregon ($4.02), Nevada ($4.02), Washington ($4.00), Alaska ($3.88), Illinois ($3.85), Arizona ($3.81), New York ($3.80) and Washington, D.C. ($3.77).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by $1.22 to settle at $91.59. Although crude prices saw some fluctuations on Friday, they surged after Russia launched its military invasion of Ukraine earlier in the week. As the conflict continues, the oil markets will likely respond by continuing to increase the price of crude oil to reflect more risk of disruption to tight global oil supplies this week. Additionally, EIA reported that total domestic crude stocks increased by 4.5 million bbl to 416 million bbl. The current stock level is approximately 10% lower than mid-February 2021, contributing to pressure on domestic crude prices.