Higher crude pressures up retail gas ahead of US Memorial Day holiday

23 May 2018 21:56 Source:ICIS News

HOUSTON (ICIS)--Elevated crude prices are pressuring up average retail gasoline prices ahead of the Memorial Day holiday weekend in the US, the US Energy Information Administration said on Wednesday.

Gasoline prices were 52 cents/gal higher on Monday than they were at the same time in 2017 and are at the highest levels heading into the holiday weekend since 2014 when prices were at $3.67/gal.

Prices jumped by 12 cents/gal over the past two weeks and by 6 cents/gal since last Monday.

Source: AAA

A combination of higher crude prices, strong gasoline demand and falling gasoline inventories contributed to rising gas costs, according to the EIA.

      Crude Oil ($/bbl) 2 May 9 May 16 May   23 May
WTI 67.93 71.14 71.49 71.84
ICE Brent 73.36 77.21 79.28 79.80

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Unseasonably high gasoline during the winter season weighed on inventories earlier in the year, increasing demand for gasoline well ahead of the typical summer high season when consumption is usually greatest.

Q1 turnarounds and ongoing production issues primarily in the US Gulf have limited gasoline production, further weighing on supplies. Production levels are expected to improve in the third quarter, which should improve gasoline inventories.

However, despite improving supplies the current dynamic indicates national retail gasoline prices are likely to average at least $3.00/gal during the summer higher season, according to projections from motorist group AAA.

By Lucas Hall