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The average U.S. gasoline price rose to the highest level since October 2014, on the back of higher crude oil prices and higher demand, AAA said ahead of the OPEC+ meeting on Monday, which sent U.S. crude prices to the highest level in seven years.
On Sunday, U.S. gasoline prices averaged $3.20 per gallon—the highest price since October 2014, due to an uptick in demand and to the rally in oil prices in recent days.
The national average of $3.20 was two cents more than a month ago and $1.02 more than a year ago, as per AAA data.
“Global economic uncertainty and supply chain concerns caused by the lingering COVID-19 pandemic could be playing a role in keeping crude oil prices elevated,” AAA spokesperson Andrew Gross said in a statement.
Crude prices continued to be elevated at the start of this week.
Prices shot up on Monday after the OPEC+ group decided to continue keeping the oil market relatively tight in November. OPEC+ agreed to keep the production plans unchanged—adding back 400,000 bpd to its collective supply next month.
This was the minimum supply boost the market was expecting and fell short of some analyst projections—and consuming nations’ hopes—that the alliance would ease the cuts by a larger amount, considering the recent oil price strength and expectations of higher oil demand because of the record high natural gas prices incentivizing gas-to-oil switch, especially in Asia.
Apart from rallying crude prices, higher U.S. gasoline demand last week also held up American gasoline prices high. As per EIA estimates, gasoline demand in the week to September 24 rose by more than 5 percent—to 9.4 million barrels per day from 8.90 million bpd in the previous week.
“However, according to the EIA, oil and natural gas production was lower than pre-pandemic levels during the same quarter in 2019. This tightened supply is helping keep crude prices above $73 per barrel and preventing pump prices from taking their usual seasonal swoon,” AAA said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.