Gasoline prices are on the rise again, just when drivers were getting used to relatively steady prices at the pump.
The national average for gasoline is at $3.71 per gallon, up $0.13 from a week ago, according to AAA. California’s average sits even higher, at $4.93 per gallon, up $0.04 from a week ago.
"It's been notable," Andrew Gross, spokesperson for AAA, told Yahoo Finance. "The driving factor has been the cost of oil."
On Thursday, West Texas Intermediate (CL=F) crude futures hit $80 per barrel for the first time since April.
“Crude oil prices are up $10 per barrel over the last month,” Andy Lipow of Lipow Oil Associates told Yahoo Finance in an email on Thursday. “That is equivalent to a 25 cent per gallon rise in gasoline raw material costs.”
The world's largest oil producers have been implementing output reductions announced over the past year. OPEC hasn't followed through with all of the production cuts, but “the amount that they are cutting in August is substantial—probably closer to 3.3 million barrels per day. It’s a lot,” said Lipow.
The extreme heat in some areas of the US has also impacted refineries, forcing them to cut their production rates of gasoline and diesel supply. Those interruptions could get worse if the US experiences a major hurricane this season.
Gasoline inventories in the US are already 4% lower than this time last year, risking further upward pressure on prices.
“What does this mean for the consumer: I expect the national average to rise another 5 to 10 cents per gallon” in the near term, he added.
While gas prices have risen in recent weeks, they remain lower than they were last summer.
The national average of gasoline exactly one year ago was at $4.30 per gallon, or $0.59 higher than it is today.
West Texas Intermediate futures surpassed $120 per barrel in June of 2022, at the same time that inflation in the US peaked.
An overall decline in energy prices since last year has helped bring down the Consumer Price Index this year. Lower prices for fuel oil and gasoline earlier this summer were a factor in helping slow down inflation in June to 3%.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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