OPEC’s announcement the first weekend of April that it will cut production by more than 1 million barrels per day starting in a month took the oil market by surprise.
In response, crude immediately surged well above $80 a barrel, although it has since struggled to stay above that mark. Meanwhile, the national average for a gallon of regular gasoline rose seven cents over a week to hit $3.55 as of April 6.
“The oil market has had a few days to digest the OPEC news and speculate about the reason. This has led to the price of oil stabilizing for now,” said Andrew Gross, AAA spokesperson, “but the cost of oil accounts for more than 50% of what we pay at the pump, so drivers may not catch a break at the pump any time soon.”
According to new data from the Energy Information Administration (EIA), gas demand increased slightly from 9.15 to 9.3 million b/d over the same week. Meanwhile, total domestic gasoline stocks decreased substantially by 4.1 million bbl to 222.6 million bbl. Increased demand amid tighter supply has contributed to pushing pump prices higher. If demand continues to rise, pump prices will likely follow suit.
The April 6 national average of $3.55 is 15 cents more than a month ago but 61 cents less than a year ago.
Since March 30, these 10 states have seen the largest increases in their averages: Ohio (+25 cents), Delaware (+16 cents), Maryland (+14 cents), Georgia (+12 cents), Oklahoma (+11 cents), Illinois (+11 cents), South Carolina (+10 cents), Wisconsin (+10 cents), Minnesota (+10 cents) and Washington, D.C. (+10 cents).
The nation’s top 10 most expensive markets: California ($4.85), Hawaii ($4.79), Washington ($4.34), Arizona ($4.34), Nevada ($4.22), Oregon ($3.95), Illinois ($3.92), Alaska ($3.83), Utah ($3.68) and Washington, D.C. ($3.66).
Source: AAA
Abby Andrews