AAA: Respite for drivers could be brief as crude oil prices rise; KY gas price increases one cent on week
A dip in gasoline demand provided drivers with a bit of stability at the pump, as the national average for a gallon of gas remains at a record high, but rose less than three cents over the past week to reach $4.62. This respite could be brief, however. Crude oil has moved above $115 a barrel due to fears of further global supply constraints caused by a European Union (EU) ban on Russian oil exports.
And, domestic gas demand may again start to climb as drivers fuel up for the three-month-long summer travel season, which began Memorial Day weekend. AAA forecast nearly 35 million travelers hit the road for Memorial Day. It’s the highest number since 2019, despite record prices at the gas pump.
“So far, the pent-up urge to travel caused by the pandemic has outweighed the burden of high pump prices for many consumers,” said Lori Weaver Hawkins, public affairs manager, AAA Blue Grass. “But 67% of drivers recently surveyed told us they would change their driving habits if gas hit $4.50 a gallon. That number rises to 75% at $5 a gallon. But changing their driving habits doesn’t necessarily equate to canceling summer travel. It can just mean things like combining errands and carpooling. If pump prices keep rising, will people alter their summer travel plans? That remains to be seen.”
The softening of gas demand leading up to the long holiday weekend helped to minimize price increases ahead of Memorial Day. Gas demand may spike this week after drivers took to the roads for the holiday. But the impact on pump prices could be limited if demand falls again following the holiday weekend. However, supply and demand are not the only factors at play, given the geopolitical events that have impacted crude prices and contributing heavily to higher prices at the pump.
According to Energy Information Administration (EIA) data, total domestic gasoline stocks decreased by 500,000 barrels to 219.7 million barrels last week. Gasoline demand also dipped from 9 million barrels a day to 8.8 million barrels a day, approximately 700,000 barrels a day lower than a year ago.
Today’s national average for a gallon of gas is $4.62, which is 44 cents more than a month ago and $1.57 more than a year ago.
Kentucky’s gas price average is now at $4.31, which is just 1 cent higher on the week and 49 cents higher on the month. Today’s price is $1.41 more than a year ago.
Jefferson County has the highest average gas price at $4.60, followed by Oldham County at $4.59 and Trimble County at $4.52. Lowest average in the commonwealth can be found in Henderson County remains the low spot for gas prices at $4.07, followed by Marion County at $4.11, and Hardin and Simpson counties at $4.12.
Checking nearby, the average price for a gallon of unleaded today in Ohio is $4.45, West Virginia $4.47, Virginia $4.46, Tennessee $4.28, Indiana $4.60, Illinois, $5 and Missouri $4.17.
The highest spot in the nation is California at $6.17, a 10-cent jump on the week, followed by Hawaii at $5.44. The lowest gas price average in the nation can be found in Kansas, currently at $4.13.
Meanwhile, diesel prices have dropped a few cents, with the national average now at $5.52, down 3 cents on the week. Here in Kentucky, the average price of diesel remains at $5.25, holding steady on the week. Neither represents a record.
The nation’s top 10 largest weekly increases: Wisconsin (+11 cents), Colorado (+11 cents), California (+10 cents), Utah (+10 cents), Oklahoma (+9 cents), Iowa (+9 cents), Minnesota (+9 cents), North Dakota (+8 cents) and Montana (+8 cents).
The nation’s top 10 most expensive markets: California ($6.16), Hawaii ($5.43), Nevada ($5.30), Washington ($5.23), Oregon ($5.21), Alaska ($5.21), Illinois ($5.00), Arizona ($4.95), New York ($4.92) and Washington, D.C. ($4.84).
West Texas Intermediate increased by 98 cents to settle at $115.07, at the close of Friday’s formal trading session. Crude prices rallied at the end of last week following news that the EU was seeking unanimous support of all 27 member countries to impose a ban on Russian oil later this year. Yesterday, EU leaders announced they will ban 90 percent of Russian oil imports by the end of 2022. Crude prices also increased last week after EIA reported that domestic crude supply decreased by 1 million bbl to 419.8 million bbl. The current level is approximately 13.3 percent lower than during the third week of May 2021. Crude prices could rise again this week if EIA’s next report shows total domestic supply remains tight.
AAA Blue Grass
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