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Home / Business / Gasoline prices could experience a summer spike, with prices at 4-year highs and record demand

Gasoline prices could experience a summer spike, with prices at 4-year highs and record demand



Source: AAA

At 9.8 million barrels, gasoline demand was just below the record 9.86 million barrels last week and is expected to rise in the summer. Analysts say that low unemployment and tax breaks could boost demand as more people go to work and vacation.

"Sure, we could see several weeks this week where demand for gasoline is more than 10 million barrels a day … We saw new weekly records set this summer," said Lipow Oil Associates president Lipow Oil Associates , Refineries are at a high level and capacity utilization is over 90 percent.

Gasoline prices have risen steadily, with the national average rising five cents a gallon last week and 20 cents last month. Last year, the AAA average price was $ 2.33 per gallon.

The highest ever prices for unleaded gasoline in the summer of 2008 were at national prices for unleaded gasoline averaging $ 4.1

1 per gallon. Oil rose over $ 145 a barrel this year, double current levels.

Fuel prices have risen this year, along with crude oil, which has risen 18 percent since the beginning of the year. Oil prices have risen recently as President Donald Trump tried to pull the US out of Iran's nuclear program. Trump dropped out of the agreement this week, and shortly afterwards there was the first direct military confrontation between Israel and Iran, with Iran sending missiles at the Israeli forces. Analysts said that if this type of activity continues or intensifies, it could drive oil and gas prices even higher.

West Texas Intermediate crude oil futures were down $ 71 on Friday, up more than 3.5 percent in the last two weeks. Gasoline futures rose about 6 percent over the same period.

"It's possible we could see an increase as tensions in the Middle East heat up to the point where they impact crude oil deliveries. Case the oil market would react accordingly, and you could get $ 3.50 See gallon for gasoline, "said Lipow. "I would say the probability is less than 25 percent, but that could easily change."

Dwindling production in Venezuela, which today stands at 1.5 million barrels a day, is 1 million barrels a day lower than last year

The future production of the state-owned Petroleos de Venezuela, called PDVSA, is still in production unclear, now that ConocoPhillips is seeking the company's assets in the Caribbean against a $ 2 billion arbitrage related to the seizure of Conoco assets by Venezuela in 2007

A series of vessels responsible for PDVSA operations in the Caribbean were recently rerouted to prevent the confiscation of their cargo. Other companies are expected to claim PDVSA assets, including Canadian miner Rusoro Mining, which targets Citgo assets.

"We're looking at a possible implosion, not just their crude oil exports, which are pretty low at refineries, maybe working at 30 percent of their capacity," said Kloza.

He notes that PDVSA is a major supplier of fuel to Central and South America, but its problems could mean that the US is "a bigger supplier" as things continue to run down their refining plants. "

The US exported 1.9 million barrels of crude oil per day and another 4.8 million barrels of refined products, including 581,000 barrels of gas a day, last week, and it also imports some gas from Europe and Canada to the East Coast has become a net exporter of refined products with a significant amount of diesel exports.

"The US is now exporting more crude oil than Venezuela," GasBuddy's DeHaan said, just a year ago it just seemed impossible … That is a situation that will not be reversed. "

Kloza said if oil prices rise, Trump may withdraw oil from the Strategic Petroleum Reserve or Saudi Arabia Arabia should put some oil on the market

USA oil well continue increase their production, but Kloza said that insufficient pipeline capacity is a factor that could limit the rise of US crude oil. US production continues to grow, reaching a record 10.7 million barrels a day last week, and is expected to exceed 11 million by the end of the year.

But Koza said the US also produced slightly sweet crude while the Gulf Coast refineries process heavier crude oils than we do from Venezuela.

"We just have too much light and sweet, so we will export it to China and India, and in some cases to refineries that can produce more light crude oil, so Venezuela is such a big deal," he said.


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