1 of 2 | A slight uptick in implied demand could help explain the slight increase in gasoline prices at the retail level, recent data show. File photo by Jemal Countess/UPI | License Photo
June 9 (UPI) -- Retail gasoline prices are inching higher amid signs of improved demand, data show, though a lack of movement in crude oil prices could limit any major increase in the price at the pump.
Travel club AAA put the national average retail price at $3.58 for a gallon of regular unleaded gasoline on Friday, about 2 cents higher than a week ago and 4 cents per gallon higher than this time last month.
Prices at the pump had been at a standstill for weeks amid competing market signals. Demand has been holding up, though there are emerging concerns about supply on the global scale given Saudi Arabia's recent decision to trim production levels come July.
Crude oil prices account for the bulk of what consumers see at the pump. Any chance of a rally in crude oil prices this week, however, fizzled amid rumors of a breakthrough agreement between Iran and the United States that would see Iranian oil return to the market.
The White House quickly dispelled the rumor, but damage was already done to crude oil prices. West Texas Intermediate, the U.S. benchmark for the price of oil, lost its grip on $70 per barrel on Thursday, but managed to claw back some ground by the close of the trading day.
The federal government, meanwhile, raised its forecast for WTI, from $73.62 per barrel for the yearly average to $74.60 per barrel. The gasoline price forecast changed from an expected average of $3.33 per gallon to $3.39 per gallon in its energy market report for June.
On the demand side, weekly data from the Energy Department showed a mixed bag for refined petroleum products such as gasoline and diesel.
The total amount of refined petroleum products sent to the market during the four-week period ending June 2, a proxy for implied demand, is down 0.2% from a year ago. For gasoline, however, levels are up 1.8% from this time last year.
Refineries, meanwhile, are running at near-full tilt, operating at 95.8% of their full capacity last week.
A drop in demand for refined petroleum products could show up in next week's data given the travel issues stemming from the heavy smoke settling over the eastern United States due to wildfires in Canada.