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July 11 (UPI) — Recent data shows that the most recent forecast for the annual average retail price of gasoline in the U.S. market for 2023 is one of the highest so far this year. However, the price at the pump is expected to remain below last year’s levels.
The Energy Information Administration (EIA), the statistical arm of the Energy Department, released its monthly market report for July, revealing that the price of crude oil is the primary factor affecting consumer prices at the pump. EIA estimates that the retail price will average $3.40 per gallon for regular unleaded gasoline.
The national average gasoline price, according to travel club AAA, stood at $3.54 on Tuesday, unchanged from the previous day and only slightly higher than the previous week. However, it is worth noting that gasoline prices averaged $4.68 per gallon at this time last year.
Despite a spike in crude oil prices resulting from Saudi Arabia’s decision to reduce oil production through August, retail prices have yet to reflect this increase. Russia has also announced its plans to cut output starting next month, further contributing to the rise in oil prices.
So far in July, the price of Brent crude oil, the global benchmark, has risen by nearly 6%. It started the month at $74.65 per barrel and was trading around $79 per barrel during mid-day trading on Tuesday.
Given these factors, EIA’s forecast for gasoline prices is one of the highest this year. The agency previously estimated a full-year average of $3.39 per gallon, but this was revised to a lower forecast of $3.33 per gallon in May.
Despite the high prices, consumer demand for gasoline remains strong. The EIA’s proxy for implied consumer demand indicates that the appetite for motor gasoline during the four-week period leading up to June 30 was 4.3% higher than the same period last year.
Patrick DeHaan, the lead petroleum analyst at GasBuddy, a Chicago-based company, dismissed the possibility of a significant increase in oil prices due to the production cuts by Saudi Arabia and Russia. However, he highlighted the risk of potential disruptions caused by the upcoming hurricane season. Colorado State University’s recent forecast predicts a higher number of major hurricanes for the 2023 season.
Hurricane researchers now anticipate an “above-average” season with at least four major hurricanes and 18 named storms.
