Rise in gas prices nears peak: GasBuddy analyst

GasBuddy analyst Patrick De Haan noted on “Varney & Co”. On Monday, that demand for gas “continues to rise” but argued that it “is starting to feel that we are getting closer to a top” in the price rally.

GasBuddy’s head of oil analysis told host Stuart Varney he believed gas prices would rise 5 to 15 cents over the summer, but said he was “now pulling back a bit. of that “.

De Haan also pointed to other predictions that gas prices would rise by 10 to 20 cents.

Last week, AAA warned that drivers can expect gasoline prices to rise another 10 to 20 cents through the end of August, bringing the national average to over $ 3.25 this summer. .

AAA spokesperson Jeanette McGee attributed the rise in gas prices to “robust gasoline demand and more expensive crude oil prices.”

The last time crude exceeded $ 76.40 was in November 2014 and the last time the national average was $ 3.25 was in October of the same year, according to AAA.

OIL PRICES RISE TO A 6-YEAR HIGHER

On Monday, the national gas average was $ 3.15, up 95 cents from the same period in 2020, according to AAA.

Oil traded more than 1% on Monday at $ 73.62 a barrel.

De Haan noted that over the July 4 bank holiday weekend “we saw very high demand,” and pointed to data from the Energy Information Administration (EIA).

A GasBuddy press release issued on Friday highlighted highlights from the EIA’s weekly report, noting that the gas supplied to the market stood at 10.04 million barrels per day and that so far in 2021, implicit demand, or “products supplied”, is 10.3% higher than in the previous year.

De Haan told Varney that implied demand had reached “an all-time high since the EIA began tracking this data in 1991.”

On Monday, AAA also highlighted the EIA record set last week, noting that the 10 million bpd count, “only partially reflects Independence Day holiday weekend travel.”

AAA pointed out that the nearly one million barrels per day increase in demand reduced gasoline supplies from 6.1 million barrels to 235,000 million barrels and, as a result, pushed the national average price. gas at $ 3.14.

The association also noted that the price of crude oil had fluctuated last week due to OPEC’s failure to come to an agreement on production increases, which “continues to be a dominant factor in determining until ‘where prices will go up this summer “.

“In all respects, demand was off the charts, but I’m starting to feel that we’re getting closer to a top, maybe the eighth or ninth inning of this gas price rally,” he said. he continued, stressing that he believed “there is still a little bit of room, but I think we’re almost there.”

He went on to point out that based on the current demand figures, “we could see prices start to stabilize.”

De Haan then said he believed oil prices could drop back to $ 70 if the technicalities were removed, which he said “is a possibility.”

Monday morning, De Haan developed his feeling Tweeter, “After a vibrant May and a great June, I’m starting to feel that we’re going to see the demand for gasoline ease up a bit more.”

“I think we have seen our peak (July 4th), and it’s unlikely that we will exceed it,” he continued, pointing out that as a result, he thinks a peak in gas prices could occur. earlier than late July or early August. .

In one tweet later On Monday, De Haan noted that gas prices in the United States had slowly fallen over the past few days, however, “it is too early to say if this will last.” He then pointed out that “we are probably dancing near our peak.”

AAA believes crude prices have the potential to rise this week, which will only push prices up at the pump, especially amid robust demand.

During the week, about 25 state averages rose by at least two cents, with a few seeing a jump of nine cents or more, according to the association, noting that state averages range from $ 2.76 in Mississippi at $ 4.31 in California. .

De Haan told Varney on Monday that he believed the “anti-fossil fuel movement” bolstered by President Biden’s orders to bring the US fossil fuel industry under control and tackle climate change, is contributing to the rise of the economy. gas prices by restricting the supply of oil. the United States.

The gas analyst has pointed the finger at states like California and New York and the “divestiture of listed fossil fuel companies.”

“It probably hurts these companies to get production back on line or at least change their program,” he said.

“We are still about two million barrels per day lower than pre-COVID production.”

He went on to say that he “absolutely” believed that “the anti-fossil movement” had something to do with “the slowness with which the oil companies are relaunching” production.

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De Haan also pointed to “dissent among OPEC members” as another contributing factor affecting supply and, therefore, gas prices.

The cartel, which includes Russia, has not agreed to increase oil production by the expected 500,000 barrels per day until the end of the year, as demand for oil rebounds at a faster rate than expected after the drop in COVID-19.

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Phil Flynn of FOX Business contributed to this report.