The Week

The national average price for regular unleaded gasoline has remained steady over the past week and continues to hover near at what many expect to be the highest average of the year. Friday’s price of $2.79 per gallon is three cents higher than a week ago and is 13 cents per gallon higher than one month ago. While pump prices across the country have increased since April, consumers are saving 86 cents per gallon compared to this same date last year.

As expected, OPEC opted to maintain its current production levels during its June 5 meeting in Vienna, and the global oil market is likely to remain oversupplied in the near term.  The oil cartel explained its decision by citing expectations of increased demand from emerging economies and the fact that recent increases in the global price have made the market favorable for both producers and consumers. OPEC plans to continue to monitor developments in the coming months and could reassess their decision at their next meeting scheduled for December 4.  At the close of formal trading on the NYMEX on Friday, crude oil settled at $59.98 per barrel.

 The Energy Information Administration (EIA) noted in its weekly report that crude oil inventories decreased 6.8 million barrels, marking the sixth straight weekly draw.  At 470.6 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.  Gasoline stocks decreased by 2.9 million barrels last week to 217.4 million barrels, yet remains in the upper half of the average range.  The four-week moving average for implied gasoline demand rose last week to 9.393 million barrels per day (bpd), the strongest since August 2010, when demand was regularly above 9.4 million bpd.

The Weekend

“AAA believes gas prices are poised for declines given that refineries generally complete maintenance by this time of year and gear up production for the busy summer driving season,” said Tracy Noble, Public Affairs Manager for AAA Mid-Atlantic. “In addition, the cost of crude oil is unlikely to rise significantly any time soon now that OPEC has decided not to cut production.”

The Week Ahead

Gas prices likely are poised for a seasonal decline given that refineries generally complete maintenance by this time of year and gear up production for the busy summer driving season. In addition, the cost of crude oil is unlikely to rise significantly in the near term given that OPEC decided not to cut production at its most recent meeting. Nevertheless, a number of factors could cause prices to inch higher during the summer driving season, such as geopolitical issues in the Middle East, unexpected problems at major refineries or a major hurricane that disrupts production, refining and distribution.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 
06/12/15
Week Ago
Year Ago
National
$2.79 $2.76
$3.65
New Jersey
$2.60
$2.56
$3.49
Trenton
$2.62
$2.59
$3.55
Cape May County
$2.57
$2.55
$3.47
Burlington
$2.55
$2.51
$3.44
Middlesex, Somerset, Hunterdon Counties
$2.61
$2.56
$3.49
Monmouth, Ocean Counties
$2.60
$2.56
$3.48
Crude Oil

$59.98 per barrel

$58.84per barrel
$106.53 per barrel