Prices at the gasoline pump hit an eight-month high and extended their monthlong gains, with signs that prices could keep rising during peak summer driving season.
The average
U.S. retail gasoline price
rose to $3.7137 a gallon on Thursday, the highest since Nov. 17, 2022, according to Oil Price Information Service.
The move higher is a blow to efforts by the Biden administration to keep retail gasoline prices low and alleviate pain for household budgets. Thursday’s average is still about 59 cents a gallon cheaper than last year’s average of $4.30 a gallon, according to AAA, and below June 2022’s peak price of $5.02 a gallon, AAA said.
But gasoline prices have risen about 4% in the past month.
The price of crude oil has also risen in the past month, with American benchmark
West Texas Intermediate
up 13.3% to around $79.82 a barrel. Still, prices for oil are down from their sharp rally last year after Russia invaded Ukraine in February 2022.
The rise could be linked to refinery outages, according to Patrick De Haan, GasBuddy’s head of petroleum analysis. Heat-related and other issues have affected refinery operations in Texas and Louisiana, which De Haan said is typical for summer, when the plants run nearly full-tilt.
“There’s no magic formula to determine the exact impact on gas prices,” since factors such as refineries make that relationship more murky, De Haan told Barron’s in an email. “We were paying well over $4 a gallon when oil prices were $100 [a barrel], but again, refining capacity has been really the elephant in the room that has caused gas prices to have less of a direct relationship with oil since Covid shut down a significant amount of refinery capacity.”
The fall in crude oil prices from last year is weighing on big oil producers.
Shell
‘s (ticker: SHEL) second-quarter profit was half what it was one year ago, at an adjusted $5.07 billion, compared with the record $11.5 billion last year.
Gasoline futures for August delivery are up 12.02% through Thursday, and up 49.10 cents a gallon, or 19.96%, so far this year, according to Dow Jones Market Data.
The Oil Price Information Service is a Dow Jones company, the same parent as Barron’s.
Write to Janet H. Cho at [email protected]
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