Demand for gasoline is at summertime levels already with prices at the pump up 10 cents a gallon on average nationally.
While the state averages for Arkansas and Oklahoma are $2.52 and $2.59, respectively, the national average for a gallon of regular unleaded is now $2.83. Prices on the West Coast, particularly California have sent that average up.
Data from the Energy Information Administration reveals demand jumped to 9.8 million barrels a day last week. It's about 700,000 barrels a day more than the previous week and 550,000 barrels a day more than the first week of April 2018.
AAA reports that many market analysts expect the estimate to be revised downward when EIA releases final demand figures for April later this year, but the high estimate "likely signals that 2019 could bring the highest gasoline demand rates ever recorded by EIA — potentially as early as this summer."
"We are seeing very expensive gas prices for this time of year across the country," Jeanette Casselano, AAA spokesperson, said at the group's website. "Motorists are seeing prices increase as gasoline stocks decreased substantially by 7.7 million bbl amid summer-like demand readings."
Dan McTeague, petroleum analyst with GasBuddy, points out the national average gas price has risen for the ninth straight week, adding 57 cents a gallon in that time and now costing Americans about $200 million more at the pumps today.
"The effect of rising prices isn't about to let up as a spate of refinery outages on the West Coast and in California has given way to a tightening of summer blended gasoline in advance of the summer driving season set to kick off in just over a month," McTeague said at GasBuddy.com. "Even with early signs of markets reaching their heights for California spec fuel, the damage has been done and gas prices are still playing catch up to the highs of April over the coming next couple of weeks, especially with the Easter long weekend approaching."
California pump prices now are firmly over $4 a gallon and headed to $4.15 as the rest of the nation faces the prospect of $3 a gallon by month's end, McTeauge adds.
West Coast gasoline stocks fell for a fourth consecutive week by nearly 2 million barrels from the previous week. Planned and unplanned refinery maintenance throughout the region continues to shrink stocks.
In the Rockies, gas prices are 6 to 12 cents more expensive on the week with three states landing on the top 10 list of largest weekly jumps: Utah (+12 cents), Colorado (+11 cents) and Idaho (+11 cents).
Mid-Atlantic and Northeast gasoline stocks have tightened on the week and a handful of states in that region saw significant increases at the pump: Pennsylvania (+9 cents), Tennessee (+8 cents), Rhode Island (+7 cents) and Connecticut (+7 cents). With this past week's increases Pennsylvania ($2.97) and Washington, D.C. ($2.92) inch closer to the $3-gallon mark.
Great Lakes and Central states have a dime or more increase, with Missouri (+12 cents) and Kansas (+10 cents) taking the largest one-week increase. Within the region, gas prices range from $2.94 in Illinois to $2.60 in Missouri.
The South and Southeast remain home to the cheapest gas price averages in the country with seven landing on the top 10 list this week: Alabama ($2.50), Mississippi ($2.51), Arkansas ($2.52), South Carolina ($2.52), Louisiana ($2.54), Texas ($2.57) and Oklahoma ($2.59).
On the week, these states had the largest increase in pump prices in the region: Texas (+8 cents), Oklahoma (+8 cents), Louisiana (+8 cents), New Mexico (+7 cents), Florida (+7 cents) and Arkansas (+7 cents).
Gasoline stocks have been steadily declining since the beginning of February. According to EIA data, stocks have dropped from 90 million barrels on Feb 8, to 80.7 million bbl today. Compared to a year ago, stocks are only at a one million barrel deficit.
AAA's look at oil market dynamics shows WTI crude prices went up by 30 cents to $63.89 last week. And a weaker dollar is also sending up prices because of the increased number of dollars needed to purchase crude on the global market. Another contributing factor to the price jumps came from reports that there was a 534,000-barrels per day decline in crude production by OPEC members in March, led by Saudi Arabia cutting back by 324,000 barrels per day.
"The news underscores that OPEC and its partners are making reductions in service consistent with their 1.2 million barrels per day production reduction agreement, which is in place through June," AAA's analysis states.
OPEC has announced that it will not meet in April to discuss the pact; instead, it will meet on June 25 and 26 and may announce a decision to end or extend its agreement at that time. In related news, Energy Information Administration data reveals total domestic crude inventories grew by 7 million barrels a day to 456.6.5 million barrels. Baker Hughes Inc. also reported the U.S. gained two oilrigs last week, bringing the total to 833. When compared to last year at this time, there are 18 more rigs this year.
John Lovett is a reporter with The Commercial’s sister publication, the Ft. Smith Times Record.