July 14 (UPI) — Recent data indicates that gasoline prices in the United States are now starting to reflect trends in the oil market, where concerns over supply resulting from OPEC production cuts have led to market rallies.
Last Friday, the travel club AAA reported the national average retail gasoline price at $3.66 per gallon. This figure represents a one cent increase from Thursday and a three cent increase from the previous week. Until now, gasoline prices have remained relatively stable.
The change in momentum can be largely attributed to the rise in oil prices, which have rallied due to production cuts by Saudi Arabia and Russia. Additionally, conflicts in Libya have further restricted oil output.
“While oil is currently trading relatively flat, it has experienced significant gains in recent weeks and may continue to rise,” said Craig Erlam, a market analyst for the brokerage OANDA. “Since reaching its low point on June 28, the price has increased by more than 13% and, despite facing occasional challenges, still maintains strong momentum.”
The price of crude oil has a major impact on pump prices. The Energy Information Administration (EIA), which is the statistical arm of the Energy Department, released a monthly market report that projects a price of $84 per barrel for Brent crude oil, the global benchmark, in the upcoming year.
As of early Friday, Brent was trading at approximately $81 per barrel.
However, retail gasoline prices in the United States remain significantly lower than they were a year ago and show no signs of reaching the $5 per gallon spike seen in June last year. At this time last year, the pump price was $4.60 per gallon.
The EIA’s monthly market report forecasts an average retail gasoline price of $3.40 for this year. Even with an anticipated increase in crude oil prices, gasoline prices could drop to $3.34 per gallon if the government’s forecast is accurate.
Last year, gasoline prices averaged $3.97 per gallon, while Brent crude averaged $101 per barrel due to a loss of Russian oil caused by war-related sanctions.
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