Gas prices expected to rise as summer approaches

Brent Crude

Brent Crude

Pushed up by higher crude prices and lower inventory, the U.S. Energy Information Administration expects the retail price of regular-grade gasoline will average $2.74 per gallon this summer, up from an average of $2.41 a gallon last summer. "However, higher oil prices have also enticed USA producers to ramp up crude oil exports, effectively draining US oil inventories at a higher pace than that oil is being replaced", said Patrick DeHaan, head of petroleum analysis at GasBuddy.

According to data from GasBuddy, the USA average on Thursday reached $2.701 per gallon of regular gasoline.

Past year at this time, as summer driving season was beginning, a gallon of regular gasoline was selling for an average of $2.39.

Total products supplied over the past four-week period averaged over 20.7 million barrels per day, up 5 percent from the same period a year ago. Unplanned refinery outages or other disruptions can also push prices up. California's average gas price has jumped to $3.52, compared with $2.99 a year ago.

Several factors are at work.

Oil prices rose on Wednesday.

It's not news you want to hear, but gas prices are on the rise.

Distillate fuel product supplied averaged 4.1 million barrels per day, down 3.6 percent from the same period past year.

But recent presidential rhetoric on China and Syria do not help, he added. "While the pause button may be hit for the time being on the spring surge, it is still likely we'll see prices advance again soon", said Patrick DeHaan, GasBuddy head of Petroleum Analysis.

All that creates a combination of slightly higher demand, slightly less supply and a "huge pinch point", he said. The annual summer price increase is so common, and so expected, that it even has a name - "Summer Driving Season".

"These types of things do rattle markets", he added.

The highest average price in the contiguous 48 states was $3.63 in the San Francisco Bay area.

Some gas stations offer discounts or rewards, so motorists may be able to get a couple of cents off the listed priced per gallon.

"We go home maybe two times a year now", said one driver who now lives in Alabama, but is originally from New Orleans.

"It's actually right smack dab on top of ours", he said of the EIA's outlook.

The EIA forecast is consistent with Gas Buddy's earlier forecast, which had the peak price occuring in May at about $2.73 a gallon, DeHaan said.

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