Gas tops $3.50 per gallon as oil prices rise

by themoneyoffice2.com@gmail.com March 22, 2024 · Finance

Gasoline prices increased this week to hover above last year’s average amid rising oil prices, falling inventories, and a more expensive summer blend of gas.

The national gas average on Friday sat at $3.53 per gallon, nearly $0.10 higher than a year ago, according to AAA data.

“Gas prices are a lot like seasonal temperatures. They start to rise with the arrival of spring,” said Andrew Gross, a spokesperson for AAA.

The national average on Friday sat at a higher level than a year ago for the first time since late December.

Prices in California, the most expensive state for gasoline, approached $4.97 per gallon, $0.14 more the same day last year.

Gasoline prices typically rise heading into the spring as more motorists get on the road and refineries introduce a more expensive summer driving fuel blend. This year’s retail prices have also been impacted by a steady climb in crude oil futures.

As of Friday, West Texas Intermediate (CL=F) contracts were hovering around $81 per barrel while Brent (BZ=F), the international benchmark price, traded near the $85 level. Brent and WTI have gained about $10 per barrel since the start of the year.

Ongoing output cuts from oil alliance OPEC+ along with Russian refinery interruptions stemming from Ukrainian drone attacks have lifted crude prices in recent weeks.

“While inventories are shrinking, most traders feel the latest rally in prices has happened a bit too far too fast and a corrective phase is needed. Still, the decline in Russia’s global exports (due to Ukrainian attacks) will be a supply factor as driving season begins, ” Dennis Kissler, senior vice president at BOK Financial, said in a recent note.

Drivers in the Midwest could see a slight slowdown in price increases at the pump after BP’s Whiting, Ind., refinery, the largest in the region, confirmed it has resumed full operations for the first time since its Feb. 1 power outage.

In Illinois, where gas shot up about $0.22 per gallon over the past week, the state average was hovering at $3.92 on Friday.

Higher gas prices in February were one of the main drivers behind a surprising rise in inflation reported last week.