Pump prices are climbing in response to OPEC ’s announcement that it would cut crude oil production by 1.2 million barrels, in an attempt to reduce global glut and raise oil prices.
Crude prices rose more than $4 a barrel, following the announcement on Wednesday. Oil is currently trading above $50 – the highest in more than a month. Rising oil prices makes the cost of producing gasoline that much higher, so gas prices climb too. Wholesale gasoline rose 10 cents yesterday, making it more expensive for retailers to purchase gasoline; a higher cost that is typically passed along to the consumer, AAA said.
“We usually see declining gas prices in December because of low demand, but this year prices should be more volatile,” said AAA spokesman Mark Jenkins said.
“The market is currently buying-in on the OPEC news, which could cause gas prices to jump 10-15 cents in the next week and a half,” Jenkins said. ” How long this trend continues will depend on where oil prices go from here. Some analysts believe higher prices will be difficult to sustain, as non-OPEC countries may be enticed to cash-in by ramping up production, thus leading to even more glut, and sending prices lower as a result.”
Traditionally, December lower gas prices. Pump prices for the 12th month delivered discounts four out of the last five years. Prices declined a total of 6 cents in December 2015. December 2014 saw prices decline a whopping 41 cents, as oil prices tanked from $69 a barrel to $53 and haven’t returned since.
Gasoline prices have fallen for 30 straight days, AAA said Monday. That’s the longest streak since August and September of last year, and prices have reached their lowest mark for this date since 2004.
Palm Beach County’s average for a gallon of regular is $2.34, down from $2.37 a week ago. Florida’s average stands at $2.19, down from $2.23 a week ago, according to AAA’s Fuel Gauge Report.
Even better, gasoline prices are poised to continue their slide this week as both crude oil and wholesale gasoline prices declined last week.
AAA said that while gas prices may continue to slide this month, there are a number of factors that could cause prices to rise again. This includes an increase in the global price of crude oil due to disruption in supply, stronger than expected economic indicators or geopolitical tensions overseas, as well as domestic factors such as refinery issues, production cuts due to lower prices, stronger than anticipated demand or hurricanes that impact distribution and production.
Palm Beach County’s gasoline price average hasn’t moved in the last week. It’s holding steady at $2.45 for a gallon of regular, according to AAA’s Fuel Gauge Report.
But AAA said Monday that prices could move higher because crude oil reached 11-month highs last week. Then again, maybe not!
The national average reached a new 2016 high over the weekend, and today’s national average of #$2.38 a gallon is the most expensive average since September 2015, AAA said. However, that’s still down 42 cents a gallon compared to a year ago.
“Rising oil prices typically lead to increased gas prices, but that has not happened yet,” said AAA spokesman Mark Jenkins. “Fortunately, last week’s shift in oil prices was not dramatic and wholesale prices are lower than a week ago, so it’s possible pump prices could get cheaper.”
“We’re entering the week when gas prices reached their annual peak last year. So far, fuel prices have followed similar trends as last year. It’s possible prices could peak this month, but it all hinges on which direction oil prices go for the rest of the year,” Jenkins said.
Last week, crude oil prices reached their highest point since July 2015. Daily settlements were as high as $51.23, with a weekly average of $50.18 – $1.20 more than the week before. Oil prices rose during the first half of the month on news of outages from key production countries and growing gasoline demand, but a strengthened U.S. dollar pushed prices lower toward the end of the week.
Gas prices are at their highest point for the year as the Memorial Day holiday, approaches, AAA said Monday.
The national average has increased for 12 days in a row. Despite the increase, drivers remain on target to pay the lowest prices for the Memorial Day holiday since 2005.
Palm Beach County’s average for a gallon of regular is $2.37, up from $2.31 a week ago. Florida’s average is $2.21, up from $2.18 a week ago, accoridn got
AAA projects more than 38 million Americans will travel this Memorial Day weekend, which is an increase of 700,000 compared to a year ago. That is the second-highest Memorial Day travel volume on record and the most since 2005. Nearly 34 million — 89 percent — of holiday travelers will drive to their Memorial Day destinations, an increase of 2.1 percent over last year.
Gasoline demand continues to test record levels, AAA spokesman Mark Jenkins said. A repeat of last year’s higher-than-normal summer driving season is likely, but the market remains well supplied and the relatively lower cost of crude oil
Gregg Laskoski, senior petroleum analyst for Gas Buddy, said, “With crude oil prices rallying over the past six weeks, reaching the highest point that we’ve seen since November ($48.50 a barrel) before Friday’s close, we should expect wholesale and retail gasoline prices to rise further.”
“The good news for consumers is that even with the recent increases in the price at the pump, on average we’re still paying about 45 cents less per gallon this year versus last. And in California the state average is $1 less than last year… that should please anyone with travel plans this summer,” Laskoski said.