Since Monday, the national average for a gallon of regular gasoline has increased by 11 cents to $3.72. According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 500,000 bbl to 246 million bbl last week. On the other hand, gasoline demand increased slightly from 8.66 million b/d to 8.74 million b/d. An increase in gas demand, alongside a reduction in total supply, is contributing to price increases, but increasing oil prices continue to play a leading role in pushing prices higher. Pump prices will likely continue to rise as crude prices continue to climb.
At the close of Wednesday’s formal trading session, WTI increased by $7.19 to settle at $110.60 – the highest settlement price since May 2011. Crude prices continue to surge as the conflict between Ukraine and Russia continues to bring uncertainty to the market. To help counter the impact of rising oil prices, the International Energy Agency (IEA) has coordinated a release of 60 million bbl of crude oil from its 31 member countries’ strategic reserves, including the U.S., Germany, Canada, South Korea, and Mexico. The announcement of the release did not detail the amount of each contribution from each country, but half of the release – 30 million bbl – is expected to come from the U.S. However, the pricing impact from yesterday’s announcement has been limited given that the amount of oil is small in comparison to the amount of oil that flows daily from Russia around the globe. According to IEA, Russia exports approximately 5 million b/d of crude oil, representing about 12 percent of global trade. The market will likely continue to increase the price of oil as more sanctions are imposed on Russia. A potential ban of crude imports from Russia to the U.S. or other countries will likely cause prices to continue to rise to reflect more risk of disruption to tight global oil supplies.
Additionally, EIA reported that total domestic crude stocks decreased by 2.6 million bbl last week to 413.4 million bbl. The current stock level is approximately 15 percent lower than at the end of February 2021, contributing to pressure on domestic crude prices.
Largest Weekly Increases
- Since last Thursday, these 10 states have seen the largest increases in their averages: Michigan (+39 cents), Indiana (+36 cents), Illinois (+31 cents), Ohio (+30 cents), Tennessee (+26 cents), Kentucky (+24 cents), South Carolina (+20 cents), Georgia (+21 cents), Delaware (+19 cents) and Alabama (+18 cents).