- National gas price average remains at $3.79 a gallon today, August 9, after several weeks of hikes amid a busy summer travel season.
- Gasoline production along the Gulf Coast was affected by the July heat wave in the southern half of the country, denting output.
- Crude oil prices are expected to remain north of $80.00 for the rest of 2023, due to production cuts in Saudi Arabia and growing demand.
The summer travel season has almost always been the seasonal high point for gasoline prices, from Memorial Day through Labor Day, with a few peaks in between. But besides Independence Day travel, this July also had the dubious honor of being the hottest month on record, affecting both production and demand.
The excessive heat had a complicating effect on gas prices nationwide, forcing some oil refinery operations to be slowed, including those along the Gulf Coast. Refineries are built to handle high heat and humidity, of course, but not quite the levels seen in Texas this summer over a span of several weeks, prompting a few production cutbacks.
“Last month’s extreme heat played a role in the recent spike in gas prices due to some refineries pulling back, but now operations are getting back to normal,” said Andrew Gross, AAA spokesperson.
Near-record temperatures in Texas continue to be observed this week.
The good news, if any, is that we’re only three weeks away from Labor Day, and that we haven’t seen any Atlantic hurricanes affect oil refineries in the Gulf, at least for now (knock on wood). Another bit of good news is that this time last year gas prices were about 10 cents higher on average, having retreated down from highs near the $5.00 mark in early June 2022.
We’re currently nowhere near that territory.
The bad news is that the national gasoline price average has been hovering around the $3.80 mark for a couple of weeks now, having retreated to $3.79 a gallon as of today, August 9. That’s up from the $3.59 national average recorded on July 24, and $3.75 on July 31, according to the Energy Information Administration (EIA).
Likewise, the average diesel price was at $4.32 a gallon at the start of this week, according to the EIA. By comparison, the national diesel price average was $3.90 just a couple of weeks ago.
Another bit of bad news is that the EIA expects crude oil prices to remain north of the $80.00 mark in the second half of the year.
“Crude oil prices have increased since June, primarily because of extended voluntary cuts to Saudi Arabia’s crude oil production and increasing global demand,” the EIA noted this week.
“We expect these factors will continue to reduce global oil inventories and put upward pressure on oil prices in the coming months, with the Brent price averaging $86/b in the second half of 2023, up about $7/b from our July Short-Term Energy Outlook (STEO) forecast for the same period.”
If there is any silver lining at the moment, it’s that demand is slowing a bit week to week, as the summer driving season winds down. Patrick de Haan, head of petroleum analysis at GasBuddy, noted on Sunday that demand for gasoline fell 3.4% from a week prior.
We’ll take all the good news we can get at the moment.
Are fuel price fluctuations impacting your weekly spending habits? Please comment below.
Jay Ramey grew up around very strange European cars, and instead of seeking out something reliable and comfortable for his own personal use he has been drawn to the more adventurous side of the dependability spectrum. Despite being followed around by French cars for the past decade, he has somehow been able to avoid Citroën ownership, judging them too commonplace, and is currently looking at cars from the former Czechoslovakia. Jay has been with Autoweek since 2013.
Read the full article here