US gasoline prices heading into Memorial Day weekend average $2.40/gal, up 10¢ from last year’s average, the US Energy Information Administration reported.
Despite the year-over-year increase, it marks the second-lowest price ahead of the Memorial Day weekend since 2009, when the national average price of retail regular gasoline was $2.31/gal. Relatively low crude oil spot prices, weaker year-over-year gasoline demand, and high gasoline inventories have contributed to low gasoline prices.
US gasoline prices are more closely tied to Brent crude oil prices than to West Texas Intermediate prices. Brent has been relatively stable in 2017, and weekly average prices have ranged $48-56/bbl so far this year. As of May 19, the Brent spot price was $23/bbl below its 3-year average.
The 4-week average US gasoline demand as of May 19 was 9.4 million b/d, about 2% lower than the level this time last year. Despite declining demand in 2017 so far, the American Automobile Association, in association with IHS Markit, expects more than 39 million Americans to travel this weekend, 1 million more travelers than last year and the highest travel volume since 2005.
Gasoline inventories have been averaging near or briefly surpassing 2016 levels, which were relatively high for that time of year (OGJ Online, May 24, 2017). Refinery and blender net production of finished motor gasoline has been equal to or greater than 2016 4-week average levels for 10 straight weeks.
Through May 22, US regular gasoline prices, as measured in EIA’s weekly retail survey, have averaged $2.36/gal in 2017. EIA expects the 2017 summer season—April through September—gasoline price to average $2.39/gal, up 16¢ from last summer’s average. On an annual basis, US regular gasoline prices are forecast to average $2.34/gal in 2017 and $2.45/gal in 2018.
