Gasoline demand is going through a seasonal slack-off, AAA data said in a note on Tuesday, with short days and icky weather keeping drivers at home. U.S. retail gasoline prices are on the rise despite the demand slump, with the national average rising 5.7 cents since last week to $3.327 per gallon.
Gasoline demand normally slacks off this time of year, and according to AAA, gasoline demand is unlikely to pick up until we get closer to Spring Break. Gasoline prices are rising, nevertheless, with the biggest increases seen in Colorado, Georgia, Indiana, and Nebraska. The nation’s most expensive markets continue to be Hawaii and California.
“So the primary factor in this latest increase is the higher cost of oil, which accounts for more than half of what you pay at the pump,” Andrew Gross, AAA spokesperson, said.
Energy Information Administration data shows that gasoline demand rose slightly last week from 7.51 million bpd to 7.56 million bpd—not enough to bump up gasoline prices, which are not only 5.7 cents up week over week, but 16.8 cents up over the month-ago average. Gasoline prices are also up over the year-ago average, by a slim 1.7 cents.
Gasoline inventories in the United States increased last week by 4.1 million barrels from the previous week, but still stand about 7% below the five-year average for this time of year. Petroleum inventories data—including gasoline inventory data—will be delayed by one day this week due to the Martin Luther King Jr. holiday.
WTI crude oil prices rose on Tuesday by $0.49 per barrel (+0.61) to $80.35, with traders eyeing not terrible China data showing on Tuesday better-than-expected economic growth.
By Julianne Geiger for Oilprice.com