It's unlikely that retail gasoline prices will move lower any time soon as the broader market leaves concerns about a possible global financial crisis in the rear-view mirror. File photo by John Angelillo/UPI | License Photo
March 27 (UPI) -- Following a sustained period of stability, retail gasoline prices may inch higher in bubble-up fashion as state-level prices start to influence the broader national average, an analyst said Monday.
Motor club AAA listed a national average retail price of $3.44 for a gallon of regular unleaded gasoline on Monday, unchanged from week-ago levels, but some 7 cents higher per gallon than this time last month.
Retail gasoline prices had bucked broader market moves lower amid fears the collapse of Silicon Valley Bank in California was the start of a global crisis in the financial sector. Various assurances from treasury officials, along with lending to and buyouts of struggling banks, have restored confidence in the markets.
Craig Erlam, a senior market analyst at New York brokerage OANDA, said in a statement emailed to UPI that "the panic of the last few weeks may subside and allow for a more rational market to re-emerge."
That would suggest that fundamentals such as supply and demand, rather than emotions, will drive the broader markets going forward. On demand, Chicago-based price watcher GasBuddy said its metric for consumer demand increased 0.14% between March 19 and March 26, more than its analysts had expected.
Patrick DeHaan, the senior petroleum analyst at GasBuddy, said if there are any downward trends in the price of gas, they will be fleeting as state-level prices start to rise and influence national trends.
"Motorists in some areas may be on the receiving end of good news, while others may not as we hit the second half of refinery maintenance season," he said. "You never know what the closing moments will look like, and motorists could be in for a dramatic ride if issues develop."
The refinery maintenance period coincides with a switch to a summer blend of gasoline, which is more expensive to make because of the additional steps needed to keep it from evaporating in the tank during warmer months. Some states feel that quicker than others, DeHaan suggested.
"The national average price of gasoline has seen little overall change over the last week, with big decreases in states like Colorado and Ohio offset by large increases in Arizona and North Carolina," he said.
A recovery in crude oil prices could facilitate a slow march higher for the price at the pump even further. The price for Brent crude oil, the global benchmark for the price of oil, declined nearly 12% to trade at $72.97 per barrel on March 12 as banking fears roiled the market.
Brent on Monday was trading closer to $75 per barrel as markets left banking fears largely in the rear-view mirror.