CINCINNATI – Gasoline demand measured 8.9 million b/d in the Energy Administration’s (EIA) latest weekly report, up nearly 4% from the week prior. Because of the jump in demand, gasoline supplies tightened to 230.5 million bbl, the lowest level this year, and state gas prices averages saw major fluctuations.
On the week, states saw pump price changes ranging from an increase of 15-cents to a decrease of 3-cents. Ohio gas prices increased 15-cents on the week to $2.78 per gallon. Additionally, the state’s average gas price is up more than $1.20 on the year.
Today’s national average is $2.87, which is more expensive on the week (+1 cent), month (+12 cents) and year (+94 cents).
“We anticipate demand will continue to increase throughout the month as vaccinations become more widely available and weather turns warmer,” said Jenifer Moore, AAA spokeswoman. “This will lead to fluctuation at the pump throughout the spring season.”
One factor that may help to keep the national gas price average below $3/gallon is the price of crude, which accounts for nearly 60% of the price at the pump.
After hitting a 12-month high of $66/bbl last month, crude has been priced mostly at the $60/bbl mark recently. If it stays low, even with demand increasing, it will contribute to less frequent pump price jumps.
Market dynamics
At the close of last week’s formal trading session, WTI increased $2.29 to settle at $61.45. Crude oil prices saw gains at the end of the week following the OPEC+ announcement that they will modestly increase production by 350,000 bbl starting in May.
The production increase is less than the market expected, but enough to send crude oil prices higher. This week prices are likely to fluctuate, but not spike.
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