Drivers will face July 4th highest gasoline prices in 7 years and they are rising

Gasoline prices on July 4 are expected to be the highest they were for the holiday weekend in seven years, and they are expected to rise even later in the summer.

The national average of $ 3.12 a gallon Thursday is nearly a dollar more than prices a year ago at this time, according to AAA. Analysts say the price could rise 20 cents or more a gallon this summer.

It is unusual for gasoline prices to continue to rise during the summer, and the last time this happened was in 2008, when oil jumped to around $ 145 a barrel, according to Patrick. De Haan, head of energy analysis at GasBuddy. West Texas Intermediate crude prices have jumped about 54% year-to-date to $ 76 a barrel, and gasoline has risen with it.

“I think gasoline prices will level off in the next three to six weeks,” De Haan said. “It will probably look more like a 10 to 25 cent increase, but that’s difficult to determine due to the economy.”

De Haan and others have said demand has increased as the year progresses and peak driving season, typically around Memorial Day and the July 4 holiday, could extend into this summer. Many Americans return to their offices and make their daily trips in the fall.

“Usually, prices peak from April to May,” De Haan said. “This year is abnormal. The GDP numbers accelerate until the summer and the demand for gasoline accelerates.”

“We don’t expect demand to slow down as we have traditionally seen,” said John Kilduff, partner of Again Capital. “The pandemic has changed the pattern of demand. This will keep the pressure on gasoline supplies as people avoid public transport. There will simply be no relief after July 4 at the pump that we have. we’re used to seeing. It’s going to be a long, hot summer in terms of gasoline prices. “

Oil prices rose further on Thursday, after the Organization of the Petroleum Exporting Countries reportedly considered putting less oil on the market than expected. OPEC + was discussing an increase of 400,000 barrels per day, rather than an increase of 500,000 barrels. The group also extended its meeting until Friday.

West Texas crude futures jumped 2.4% to $ 75.23, its highest level since October 3, 2018. Brent crude futures, l ‘international benchmark, gained 1.6% to $ 75.84.

Gasoline prices “are rising as crude oil prices continue to rise and demand around the world recovers,” said Andy Lipow, president of Lipow Oil Associates. OPEC + has been reluctant to restore production as demand picked up, in order to reduce global stocks. OPEC feared that Iranian oil would return to the market and that the delta Covid variant could potentially have a impact on demand, so OPEC keeps tight control over catering production because they don’t want to see a repeat of last year. “

Tom Kloza, head of global energy research at OPIS, said he expects the national unleaded gasoline average to hit around $ 3.35 in the next 60 days, and hit 4 $ in certain locations in the western United States. California is already experiencing prices above $ 4 per gallon.

“I clearly think there is a lot of momentum for crude prices to go up,” Kloza said. “I think there is more pricing power. There is more aggressive pricing from retailers. I think it will be so even if demand does not reach 2019 levels. In 2019, basically July and August, you were 9.5 to 9.9 million barrels per day. That’s a lot of fuel. “

According to the Energy Information Administration, gasoline demand last week was 9.1 million barrels per day in the United States, up from 9.4 million barrels per day the week before. This compares to 8.6 million barrels a day a year ago.