WASHINGTON, D.C. — The cost of a barrel of oil is nearing $120, nearly double from last August, as increased oil demand outpaces the tight global supply. Meanwhile, domestic gasoline demand rose last week in the wake of a robust Memorial Day weekend of travel. As a result, the national average for a gallon of gas surged 25 cents in one week to hit $4.86.

“People are still fueling up, despite these high prices,” said Andrew Gross, AAA spokesperson. “At some point, drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet.” 

According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks decreased by 700,000 bbl to 219 million bbl last week. Meanwhile, gasoline demand grew from 8.8 million b/d to 8.98 million b/d as drivers fueled up for Memorial Day weekend travel. These supply and demand dynamics have contributed to rising pump prices. Coupled with volatile crude oil prices, pump prices will likely remain elevated as long as demand grows and supply remains tight.

Today’s national average for a gallon of gas is $4.86, which is 59 cents more than a month ago, and $1.81 more than a year ago.

Quick Stats

• The nation’s top 10 largest weekly increases: Michigan (+45 cents), Illinois (+41 cents), Indiana (+41 cents), Wisconsin (+39 cents), Ohio (+38 cents), Nebraska (+37 cents), Kentucky (+36 cents), Colorado (+35 cents), Minnesota (+34 cents) and Texas (+32 cents).

• The nation’s top 10 most expensive markets: California ($6.34), Nevada ($5.49), Hawaii ($5.47), Oregon ($5.41), Washington ($5.40), Illinois ($5.40), Alaska ($5.37), Washington, D.C. ($5.06) and Michigan ($5.05). 

Oil Market Dynamics

At the close of Friday’s formal trading session, WTI increased by $2 to settle at $118.87. Crude prices rose last week after OPEC+ announced it would increase monthly production to 648,000 b/d in July and August instead of 400,000 b/d as previously planned. However, the market is still concerned that supply could remain tight as the European Union works to implement a 90 percent ban on Russian oil imports by the end of this year. Additionally, prices were boosted after EIA reported that total domestic stocks decreased by 5.1 million bbl to 414.7 million bbl. The current storage level is approximately 13.5 percent lower than a year ago, contributing to rising crude prices. For this week, crude prices could rise again if EIA’s next report shows another decrease in total domestic stocks.

Drivers can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad, and Android. The app can also map a route, find discounts, book a hotel, and access AAA roadside assistance. Learn more at AAA.com/mobile.