Although gasoline demand has started to slow down the end of the summer driving season, U.S. gasoline prices are bucking the trend and sitting at their highest for this season since 2014, due to the oil price rally over the past weeks.
According to AAA data, carried by Reuters, the national average U.S. gasoline price was $2.867 a gallon as of Wednesday, the highest seasonally since 2014, when oil prices started to crumble in the latter part of that year.
Gas prices usually drop after the peak summer season, but this year prices at the pump have not fallen as fast as expected, AAA spokesperson Jeanette Casselano told Reuters.
While prices inched down from last week heading into this week, they were 27 cents more expensive than this time last year, AAA said on Monday.
“Crude oil prices pushed past $70/bbl for three days last week,” Casselano said on Monday. “If they trend above this level for a sustained amount of time, we could see a trend reversal in pump prices meaning it may cost more to fill-up as we get closer to the end of the year.”
This week, following the lack of action by OPEC which didn’t announce any plans for further boosting supply, WTI Crude prices have trended higher and broken above $72 a barrel.
Just before the OPEC meeting this weekend, U.S. President Donald Trump blasted OPEC on Twitter, again, demanding that the cartel ‘must get prices down now!’
This week, President Trump continued with his criticism of OPEC, telling the United Nations General Assembly:
“OPEC and OPEC nations, are, as usual, ripping off the rest of the world, and I don’t like it…We want them to stop raising prices, we want them to start lowering prices, and they must contribute substantially to military protection from now on. We are not going to put up with it — these horrible prices — much longer.”
Patrick DeHaan, head of petroleum analysis for GasBuddy, said on Monday that with the tighter oil market and OPEC’s inaction, “gas prices may not see the typical decline we had been expecting as recently as the last two weeks as new concerns emerge about the tightrope balance some oil producing countries are hoping for- pushing supply down as global demand rises. That’s not going to be good news for motorists.”
“The absence of a decline at the pump in the fall could be notable as voters head to the polls,” DeHaan told Reuters.