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Gasoline prices in the United States have dropped to a national average of $4.087 per gallon, down from $4.114 a week ago, but with oil prices rising again on the Russia-Ukraine war and production shutdowns in Libya, prices at the pump could rebound again.
A month ago, the national average at the pump was $4.274 per gallon, according to AAA, still shy of the highest ever national average on record on March 3rd, 2022, of $4.331.
While the national average is down over the past week, Monday saw oil prices rise well above $100 on European discussions of a ban on Russian oil and gas and on announcements from the Libyan National Oil Company (NOC) of force majeure at its two biggest oilfields and export terminals.
Brent crude ended Thursday at $112.7 per barrel, while WTI closed above $108 per barrel, suggesting that there could be more pain ahead at the pumps.
Demand for gasoline is also showing signs of uptick with the summer driving season in clear focus and prices having dropped slightly from earlier highs.
California, which has borne the brunt of high gasoline prices, saw its state average drop from $5.8 a month ago to $5.708 Monday.
While gasoline prices are now down about 3 cents from a week ago and this is sparking some optimism at the pumps, the growing consensus is that the cheaper fill-up won’t last long if oil continues to climb.
Gasoline futures have risen 30 cents in the past week.
The Bloomberg Consensus forecast is for NYMEX RBOB gasoline futures to hit $3.26 per gallon this year.
Andy Lipow of Lipow Oil Associates forecast for Foxbusiness predicts that national averages for gasoline prices will rebound to between $4.15 and $4.20 per gallon.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com