With market inventories in the south central U.S. region jumping by 2.5 million barrels, gas prices remain steady to lower as a result of high gasoline inventories and low demand. As we await the onset of the summer driving season, AAA predicts there are plenty of opportunities for demand to tap into the country’s excess supply and the price of gas to rise.
Current Price Averages per Gallon of Regular Gasoline
- Tulsa – $2.11, up nine cents from one month ago … up 19 cents since 4/24/16
- OKC – $2.13, up seven cents from one month ago … up 22 cents since 4/24/16
- Oklahoma – $2.15, up six cents from one month ago … up 22 cents since 4/24/16
- S. – $2.42, up 13 cents from one month ago … up 29 cents since 4/24/16
“Oklahoma’s lower state average price – down a nickel over the past 10 days – is beating the national trend,” said Chuck Mai, spokesman for AAA Oklahoma. “The nationwide gas price average is at its 2017 high, but summer demand has not yet kicked in and it’s likely pump prices will rise in the coming weeks. Based on recent American Petroleum Institute reports, U.S. gasoline deliveries in March were the second highest March deliveries ever recorded, confirming the forecast that demand is on track for the summer.”
The nation’s top 10 markets with the largest weekly increases include: Utah (+9 cents), Ohio (+7 cents), Idaho (+5 cents), Alaska (+5 cents), Massachusetts (+4 cents), Connecticut (+4 cents), Indiana (+4 cents), New Hampshire (+4 cents), Rhode Island (+4 cents) and Florida (+4 cents)
Global Market Dynamics
At the close of trading last week, WTI crude oil futures fell $1.09 to settle just under $50 per barrel. One of the leading reasons for the drop was skepticism about whether the Organization of the Petroleum Exporting Countries (OPEC) and other producers would extend their pledge to cut output by 1.8 million barrels by another six months. In particular, the market is still unsure if Russia will agree to an extension deal beyond June 30, which could add dramatically to already bloated global inventories.
Last week’s Baker Hughes oil rig count report showing the U.S. adding 5 rigs, bringing the total rig count to 688 — is further evidence of increased U.S. production. Traders will look closely at this week’s numbers from key indicators of supply to determine if the market will rebalance in the near term.
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