September 24,2023-
The national average for a gallon of gas rose by a nickel since last week to hit $3.85. The primary culprit is the surge in oil costs, which have jumped several dollars to hover around $90 per barrel.
Oil rich countries including Saudi Arabia and Russia have cut supply by about 2 million barrels a day.
“Oil costs are putting upward pressure on pump prices, but the rise is tempered by much lower demand,” said Andrew Gross, AAA spokesperson. “The slide in people fueling up is typical, with schools back in session, the days getting shorter, and the weather less pleasant. But the usual decline in pump prices is being stymied for now by these high oil costs.”
According to new data from the Energy Information Administration (EIA), gas demand decreased significantly from 9.32 to 8.31 million b/d last week. Meanwhile, total domestic gasoline stocks jumped from 214.7 to 220.3 million bbl. Although gas demand has dropped amid increasing stocks, elevated oil prices have pushed pump prices higher.
There is still another factor in lower demand. The EIA reduced the U.S. gasoline consumption forecast this week because the U.S. Census Bureau revised its population estimates for the United States to include fewer people of working age and more people of retirement age, who tend to drive less. The revised population estimates have also resulted in a downward revision of our vehicle miles traveled(VMT) forecast, which directly affects motor gasoline consumption. They forecast U.S. gasoline consumption will average 8.9 million b/d in 2023 and 8.7 million b/d in 2024. The 2024 forecast is down by 0.2 million b/d from our August STEO.
Today’s national average of $3.85 is the same as a month ago but 15 cents more than a year ago.But not in California where the average pump price has gone up 53 cents to $5.76 a gallon!
Wholesale gasoline futures for Los Angeles predict a big drop of 70 cents in October. We can only hope.
Worried about how much we import? Most it it is now comes from Canada.