After setting a new record high national average for a gallon of gas on May 10, AAA reported that prices around the country have increased every day since. The previous record — set earlier this year on March 11 — was $4.33. Now, the national average for a gallon of gas is $4.59, with all 50 states being above $4 per gallon.
“Gasoline is $1.05 more than it was on February 24, when Russia invaded Ukraine,” said Andrew Gross, AAA spokesperson. “That sent shock waves through the oil market that have kept oil costs elevated. Domestically, meanwhile, seasonal gas demand is rising as more drivers hit the road, despite the pain they face paying at the pump.”
According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 4.8 million bbl to 220.2 million bbl last week. Meanwhile, gasoline demand increased from 8.7 million b/d to 9 million b/d. Tighter supply and increased demand have pushed pump prices higher. This dynamic between supply and demand as well as volatile crude prices will keep upward pressure on pump prices.
Today’s national average for a gallon of gas is $4.59, which is 47 cents more than a month ago, and $1.56 more than a year ago.
The nation’s top 10 largest weekly increases: Alaska (+31 cents), Michigan (+18 cents), Indiana (+18 cents), New York (+18 cents), Washington (+17 cents), West Virginia (+17 cents), Ohio (+16 cents), Oregon (+16 cents), New Jersey (+16 cents) and Maine (+15 cents).
The nation’s top 10 least expensive markets: Oklahoma ($4.04), Kansas ($4.05), Arkansas ($4.12), Minnesota ($4.14), Colorado ($4.14), Georgia ($4.14), Missouri ($4.15), Nebraska ($4.15), Iowa ($4.15) and North Dakota ($4.17).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI increased by $1.02 to settle at $113.23 — nearly $3 per barrel higher than the closing price at the end of the previous week. Crude prices rose after EIA reported that domestic crude supply decreased by 3.4 million bbl to 420.8 million bbl. The current level is approximately 13.4% lower than during the second week of May 2021. Additionally, market optimism for China’s efforts to end some COVID-19 restrictions by June 1 helped to bolster the market, which has continued to worry that global crude demand will decline as a result of continuing restrictions. For this week, however, crude prices may decline amid heightened economic uncertainty as the likelihood of a recession increases. A recession would likely cause crude demand to drop amid decreased economic activity and as a result, crude prices would decline.