1 of 2 | A federal forecast for the annual average for a gallon of regular unleaded gasoline was among the highest so far this year. The price at the pump, however, remains well below year-ago levels. File Photo by Gary C. Caskey/UPI |
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July 11 (UPI) -- The most recent forecast for the retail price of gasoline in the U.S. market for the year is among the highest so far in 2023, though the price at the pump will almost certainly stay below-year ago levels, data show.
The Energy Information Administration, the statistical arm of the Energy Department, published its monthly market report for July on Tuesday. Showing that the price of crude oil accounts for the bulk of what consumers see at the pump, EIA estimated the retail price would average $3.40 for a gallon of regular unleaded gasoline.
Travel club AAA put the national average at $3.54 on Tuesday, unchanged from the previous day and only a few cents higher than week-ago levels. Gasoline prices averaged $4.68 per gallon this time last year.
Retail-level prices have yet to respond to a spike in crude oil prices that came as a result of a decision from Saudi Arabia to curtail oil production at least through August. The kingdom was joined by Russia in an announcement that it too would trim output starting next month.
So far in July, the price for Brent crude oil, the global benchmark, is up nearly 6% after starting the month at $74.65 per barrel. Brent was trading at around $79 per barrel during mid-day trading on Tuesday.
With that, EIA's forecast is among its highest so far this year. The agency last month estimated a full-year average of $3.39 per gallon, but the forecast was low -- at $3.33 per gallon -- in the May forecast.
Consumer demand remains strong. A proxy used by the EIA to gauge implied consumer demand showed the appetite for motor gasoline over the four-week period to June 30 was 4.3% higher than during the same period last year.
Patrick DeHaan, the lead petroleum analyst at Chicago-based GasBuddy, discounted the prospect of a major surge in the price of oil because of Saudi and Russian production cuts.
"But there is rising risk for hurricane season and potential disruptions as major forecaster Colorado State University released its third forecast for the 2023 hurricane season, showing a sharp uptick in the number of expected major hurricanes," he said.
Hurricane researchers are now predicting an "above-average" season with at least four major hurricanes and 18 named storms.
