July 7 (UPI) — An increase in demand for road fuels and decisions from major oil producers to curb output were not enough to lift U.S. gasoline prices this week, data show. But that could change.
Travel club AAA listed a national average retail price of $3.54 for a gallon of regular unleaded gasoline for Friday, a slight increase from the previous day but stable compared to this time last month.
Demand was robust over the July Fourth holiday period, with a record 43.2 million people opting for a road trip this year. With retail gas prices about $1.20 per gallon less than this time last year, the demand trends are apparent.
For the week ending June 30, data from the Energy Department showed the total amount of motor gasoline supplied over the four-week period, a proxy for implied demand, was 4.3% higher than this time last year.
Meanwhile, crude oil prices, which account for the bulk of what consumers see at the pump, are on the rise after decisions from Saudi Arabia and Russia to trim their production levels in August.
The price for Brent crude oil, the global benchmark for the price of oil, is up more than 3% on the week, though that increase has yet to make it to the consumer level.
For some, the production cuts are a tacit acknowledgement that global demand is weakening in response to lingering inflationary pressures.
But for Craig Elam, a senior analyst at the brokerage OANDA, it may be only a matter of time before markets post a major rally.
“The rally over the last week or so from the range lows has been quite strong and backed by momentum — as well as fresh cuts from Saudi Arabia and Russia — and despite being pushed back from the recent highs over the last couple of days, it’s continued to drive higher in a way that could see the upper boundary buckle,” he said.
