The biggest gasoline draw since 1990 amid refinery shutdowns due to the Texas Freeze could push up the U.S. national average gasoline price to $3 a gallon for the first time since 2014, especially after the OPEC+ group decided on Thursday not to ramp up collective production in April.
The EIA estimated in its inventory report on Wednesday a 13.6-million-barrel decline in gasoline stocks for the last week of February and a massive crude build of 21.6 million barrels, with data highly distorted by the disruptions to U.S. crude oil and gasoline production during the cold snap in February.
At the same time, U.S gasoline demand jumped last week to the highest level since the COVID-19 pandemic started, according to GasBuddy data.
According to final numbers from Sunday, Pay with GasBuddy showed that U.S. gasoline demand rose by 18.2 percent versus the prior Sunday, Patrick De Haan, head of petroleum analysis for GasBuddy, tweeted on Tuesday.
Sunday’s gasoline demand was 5.7 percent higher than the previously highest Sunday since the pandemic started, which was October 18, 2020.
“According to Pay with GasBuddy data, last week’s total gasoline demand soared to the highest level since the pandemic began as COVD-19 cases continue to drop and Americans are filling up more,” De Haan said on Monday.
The still low refinery runs—because of shutdowns—and the rising demand risk lifting the U.S. average gasoline price to $3 a gallon.
As of March 4, the national average was $2.745 a gallon, according to AAA data.
“I feel like the market needs at least 750,000bpd, but 1 million+ would basically take a $3/gal national average off the table in the US,” De Haan tweeted on Tuesday, referring to the OPEC+ decision expected on Thursday.
If OPEC+ doesn’t return a substantial volume on the market, “This could be bad for motorists this summer and raises the prospects of a $3/gal national average from even weight to likely,” he said on Wednesday.
ADVERTISEMENT
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Is This The World’s Next Big Offshore Oil Region?
- Oil Soars As OPEC+ Sources Suggest No Production Increase
- Will Private Shale Firms Crush The OPEC Oil Rally?
